It is vexing that American and European companies that flaunt credentials of transparent business ethics in their home countries would come to Nigeria to carry on their businesses in manners that could best be described as fraudulent and opaque. These companies glaringly operate in Nigeria as if they are above the law.
When President Goodluck Jonathan signed into law the Nigerian Oil and Gas Industry Content (NOGIC) Act popularly known as the Nigerian Content (NC) Act on the 22nd of April, 2010, he meant well for the nation. But since then, the dubious activities of some foreign transnational oil companies, no doubt, has continued to undermine both the Content Board and whatever good intentions the act itself was originally set to achieve in the nation’s oil and gas sector.
The Nigerian Content Act was meant to increase indigenous participation in the Nigerian oil and gas industry; build local capacity and competences; create linkages to other sectors of the national economy; and contribute to the growth of our National Gross Domestic Product. But except the Federal Government stepped in to checkmate the impunity with which foreign transnational operators flagrantly disregard the spirit and intent of the nation’s local content initiative, the entire oil and gas sector would sooner than anticipated be totally hijacked by those who don’t mean well for our effort at encouraging indigenous participation in this crucial sector of our economy. This is the bitter truth that the federal government must wake up to confront.
It is vexing that American and European companies that flaunt credentials of transparent business ethics in their home countries would come to Nigeria to carry on their businesses in manners that could best be described as fraudulent and opaque. These companies glaringly operate in Nigeria as if they are above the law.
This is to bring to the notice of the federal government and the National Assembly the subterfuge and underhand tactics and methods employed by the Nigerian subsidiary of General Electric (GE) of USA and the Nigerian subsidiary of the Italian transnational oil operator, ENI, to circumvent due process and transparent transactions in their operations.
How could anybody describe Nigerian Agip’s circumventing of due process by giving Purchase Orders to General Electric International Operation Nigeria (GEION) every two days, and I mean every two days for the Maintenance Service Contract For Gas Turbines And Related Equipment For OB/OB, Ebocha And Kwale Gas Plants belonging to the Nigerian subsidiary of the Italian ENI, if not to say that it is an outright illegality? Is this not fraud and corruption at its peak? Interestingly, this arrangement has been on with impunity for a period of over twenty two (22) months.
The fraud started on the 26th of February, 2013 in a secret or rather classified contract signed by Giovani Salvin, General Manager District for NAOC and Harry Webster, Regional Business Leader- Sub Sahara Africa, for GE International Operations Nigeria (GEION). And it has been running since then.
Extracts from the template of the running illegal contract reads: “Now Therefore, in consideration of the mutual covenants and agreements hereafter provided, it is agreed as follows:
“Terms of Contract- Agreed terms of reference as per Revision No. 1 Contract No. 4500008870 for one additional year extension.
“Duration of Contract: From 04/02/2013- 05/02/2013, for a total of two days.
“Commercial Conditions: Daily Rate of USD 212, 990.29.”
So for every two days, Agip pays GE USD425, 980.58 (Four Hundred Thousand, Nine Hundred and Eighty and Fifty Eight Dollars).
The scheme was to criminally keep the fee below USD500, 000.00 (Five Hundred Thousand US Dollars) by splitting it into daily rates so as to beat the ceiling set by the guiding rules of the Joint Venture with NNPC which requires all contracts from USD500, 000.0 and above to be submitted to NAPIMS for vetting and approval. You see the fraud of an American firm conniving with its Italian partner in Nigeria.
The Purchase Order arrangement between Agip and GE which is not backed by the Law of this Land, has led to the payment of over US$182 million (One Hundred and Eighty Two Million United States Dollars) or about N29.5 billion (Twenty Nine Billion and Five Hundred Million) to GE without recourse to joint venture appropriation and approval.
This is being done while the short- term contract or stop-gap maintenance service contract is bogged down in protracted negotiations as well as in twists and turns.
How can we as a country allow these foreign operators covertly drain the nation of such huge amount of money with impunity? Are these companies above the Laws of the Land?
This is being done by the Italian and American globalisation allies while the short term contract or stop-gap maintenance service contract which was supposed to go a Nigerian firm Arco is bogged down in protracted negotiations as well as in twists and turns as part of the alliance’s manipulations to strangulate the Nigerian firm out from the job.
Why should General Electric (GE) and Nigerian Agip be so desperate that Arco, a tested and competent Nigerian indigenous maintenance company should be wrestled out of the gas plant maintenance contract? How come the Nigerian company is now classified as a competitor and no longer an associate of General Electric?
On this same matter, the NNPC in a letter to the Managing Director of Agip, captioned “NAOC Maintenance Service Contract For Gas Turbines And Related Equipment For OB/OB, Ebocha And Kwale Gas Plants” dated 13 June, 2014, and signed by the Group General Manager NAPIMS, Jonathan K. Okehs, had insisted that “NAOC to immediately commence negotiation with Arco Petrochemicals Ltd, with a view to awarding a six-month Stop-Gap contract using the manpower loading that was approved for the 2013 Stop-Gap contract.
“You are therefore guided to abstain from any award of a stop-gap contract to Plantgeria for NAOC Maintenance service contract for Gas Turbines and related equipment for OB/OB, Ebocha and Kwale Gas Plants because this will constitute an illegal contraption.
“Thereafter, NAOC to execute a bridge framework Agreement with Arco Petrochemicals Ltd for the provision of Maintenance Service contract for Gas Turbines and related equipment for OB/OB, Ebocha and Kwale Gas Plants for six-month Stop-Gap contract. This will enable Joint Venture maintain the facilities pending the award of the ongoing replacement contract.”
“NAOC proposal to execute an interim award contract with Plantgeria for a replacement tender of which award recommendation has not been presented for NNPC Board consideration and approval is declined and not approved.”
“NAPIMS will not support any cost expended on NAOC maintenance service contract for Gas Turbines and related equipment for OB/OB, Ebocha and Kwale Gas Plants arising from NAOC execution of such services with Plantgeria (another wholly-owned Italian firm being smuggled by Agip and GE to undo the Nigerian Arco).
It is very clear that the Nigerian Agip Oil Company (NAOC), a subsidiary of the Italian transnational oil giant, ENI has left out the substantive issues in its breach of the Nigerian Content Act and has been covertly manipulating due processes and rule guiding their operations.
Multinationals that do business in Nigeria are most welcome but they must learn to play by the rules and not continue to carry on as if to confirm the impression that Nigeria is a country where anything goes and where any regulator could be compromised provided the price is right.
IFEANYI IZEZE is an Abuja-based Consultant and can be reached ay: [email protected]; 234-8033043009.