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Total directs Hyundai to comply with Nigerian Content Law

By BusinessNews Staff on April 30, 2014

Following the violation of the Nigerian Content Act by a Korean contractor, Hyundai Heavy Industries (HHI), in the execution of Ofon-2 Project, Total Exploration and Production (E&P) Nigeria Limited has directed the Korean firm to ensure full compliance with all applicable provisions of the law.

HHI is the contractor on the Ofon-2 Project, a joint venture between the Nigerian National Petroleum Corporation (NNPC) and Total.

Located 65 kilometres offshore Nigeria and in a water depth of 40 metres, the Ofon deepwater field is in Oil Mining Lease (OML) 102.

The Ofon Phase II is a 90,000 barrel-per- day project consisting of construction and installation contract to unlock the Ofon field’s undeveloped reserves, by installing four new platforms – two production platforms, a processing platform and an accommodation platform.

The Nigerian Content Development and Monitoring Board (NCDMB) recently accused HHI of violating the law in the execution of the project and banned it from bidding for oil and gas projects in Nigeria.

The agency accused the contractor of gross violations of Sections 28, 33 and 41 (2) of the Nigerian Oil and Gas Industry Content Development Act and deploying non-compliant assets and expatriates on the project.

HHI was accused of flooding its vessel-Jascon-31 which is working for Total on the Ofon II project with expatriates who do not have approvals from the board and whose roles can easily be performed by Nigerians.

According to a letter from the Executive Secretary of NCDMB, Mr. Ernest Nwapa, to HHI, “there are One hundred and Eighty Four (184) HHI staff presently on the project out of which only two (2) are Nigerians while the other 182 are Koreans.”
But Total said in a statement yesterday that it had directed HHI to significantly review the manning ratios to ensure compliance with the provisions of the law.

The French oil giant said even though the Ofon contracts were signed in 2007 before the Nigerian Content Act came into effect in 2010, it supported the federal government’s aspirations in respect of Nigerian capacity development and increase of local content in the oil and gas sector.

“Total has therefore directed HHI to significantly review the manning ratios to ensure the provisions of the Act are complied with.

Following Total’s directive, HHI has increased Nigerian manning participation from 29 per cent to 65 per cent. Fifty expatriate workers from HHI have been replaced by Nigerians and 50 additional positions have been created on the site to train Nigerian staff during the pre-start-up phase of the project,” said the statement.

Total also expressed its commitment to work with NCDMB and its contractors to increase local capacity and to train workers for the upcoming projects in Nigeria.
“With a high ratio of Nigerian content over our major development projects over the last few years on Akpo and Usan and on the recently launched Egina project, Total and its partners are proud to be the leader in Nigerian content development,” the oil giant added.

[This Day]

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