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Egina-FPSO in Lagos

Egina FPSO arrives oil field, production stalled by LADOL, Samsung dispute

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The industry wide celebration that welcomed the safe arrival of $3.3bn Egina Floating Production Storage and Offloading (FPSO) is now being rubbished by high level conflict between the management of LADOL and Samsung Heavy Industries (SHI), South Korea.
The platform has arrived site in Egina oil field, about 130kms offshore, but the inability to secure necessary parts needed to hook it up on seabed for final commissioning that will activate oil production which is expected to yield 200,000 barrels per day (bpd) is the current problem.
It would be recalled that Egina FPSO is dedicated for the storage of $16 billion Egina oil and the delay caused by the delay in hooking it on seabed.
Though a high ranking officials in the know of the crisis confided in Business Hilights that the issue borders on preliminary agreement loopholes and logistics, LADOL’s lawyer, Prof. Fidelis Oditah pointed out three key angles to the dispute.
According to him, “first, the ownership of SHI MCI FZE, which is a joint venture between LADOL and Samsung formed to perform the Egina FPSO EPC contract between Samsung and Total Upstream Nigeria Limited.
“The second aspect is SHI MCI FZE’s sub-lease agreement with a LADOL affiliate, Global Resources Management Limited, GRML. “The third is SHI MCI’s operating licence as a free zone enterprise within the LADOL free zone.”
The above is responsible for the delay in the daily production of 200,000 bpd from the Egina field.
An insider at LADOL revealed that the needed seabed hooking components currently trapped at LADOL Dockyard cannot be released due to the lingering trade dispute between the Free Trade Zone and Korean shipbuilders.

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