Three Oil Flow Stations Threatened as Niger Delta Communities Fight Saipem

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Chineme Okafor in Abuja
Disagreements over alleged contractual irregularities between communities in Niger Delta and Italian oil contracting firm, Saipem, may result in the disruption of crude oil flow at the three flow stations located at Beniseide, Tunu and Ogbotobo, THISDAY has learnt.

The development it was gathered yesterday could also disrupt operations in Nigeria’s oil and gas industry following a call on the Shell Petroleum Development Company of Nigeria (SPDC) by the communities to stop contracting Saipem to handle its oil and gas projects within their areas.

The communities, which said they do not want the Saipem Consortium to henceforth operate within their areas, alleged that the company had perpetrated contractual illegalities and fraudulent practices in its dealings with them while undertaking its contract on three gas plant projects technically referred to as SSAGS+, on behalf of SPDC.

They said as the host of the Beniseide, Tunu and Ogbotobo Flow Stations they would disrupt production flows if their grievances are not addressed by SPDC which they have asked to disengage Saipem from the project site.

The spokesman of the communities, Pere-ebibo Cinema Fufeyin, told journalists in Abuja that youths of the various communities were already mobilising to take their protest to the Embassies of the United Kingdom and Italy in Abuja, against the continued presence of Saipem in their area.
Fufeyin said the communities were contesting alleged contractual illegalities and fraudulent practices by the Saipem in its dealings with them.

He specifically said despite several complaints by the communities over the flagrant disregard and subversion of agreements guiding its operations in their area, including Memorandum of Understanding (MoUs) and  Freedom to Operate (FTOs), Saipem had allegedly continued to front one Kenneth Oboku who takes up all the sub-contracts meant for the host communities.

According to him, Saipem had also ignited several intra-communal crises in all communities where it operated. Such crisis he explained had occasionally led to violent clashes.
“Prior to the commencement of the project, an agreement was reached, officially documented and signed by representatives of the various communities, SPDC and Saipem Consortium.
“The agreement specifically outlined the community/contractor’s commitments to enable smooth implementation of the projects,” said Fufeyin.

He stated that the communities had in the letters of the agreements, committed to assist SPDC in removing all structures on its acquired land around the flow stations to allow for smooth construction works by Saipem Consortium. He added that the commitment has since been fulfilled but the contractor failed to fulfill its end of the agreement.

According to him, “SPDC/Saipem as part of the contractor’s responsibilities, agreed and expressed commitment to ensure that sub-contracting opportunities for the supply of materials and the provision of services as required by the SPDC contractors for the project activities will be awarded only to qualified indigenous contractors.

“Apart from drawing a list of 10 sub-contract opportunities to be mandatorily preserved as indigenous lots, it was also emphasised as part of the contractor’s commitments, that qualified community contractors registered with Saipem Consortium Nigeria Limited (SCNL) will also be allowed to tender via competitive bids with other non-community contractors for services/supplies not stated on the exclusive indigenous list as may be required in the course of executing the project, and that the contractor shall solicit the supply of equipment from the communities in all cases where such equipment are not consortium owned.”

Fufeyin further explained that these were among other commitments made in line with the statutory local content regulation of the federal government in which the contractor committed itself to source 100 per cent and 60 per cent of unskilled and semi-skilled workers respectively, and as well liaising with the leaders of the communities to source for some skilled workers in the project area.

“While we had no doubt that a diligent, transparent and holistic implementation of these commitments would have provided the required peaceful environment for execution of the project, officials of Saipem Consortium mobilised to the various sites  with a sinister grand design to criminally corner the opportunities, including human, material and financial, accruable to the communities.
“The fact is that Saipem/SPDC Nigeria officials involved in the project are using Kenneth Oboku as a front to circumvent the implementation of the contractual commitments with the communities, especially with regards to the award of sub-contracts to enable them seamlessly divert the proceeds to their private pockets,” he noted.

Fufeyin also stated: “Instead of awarding sub-contracts reserved for members of the host community as earlier agreed and endorsed by SPDC/Saipem Consortium and the communities, these exclusive sub-contracts are all awarded to the contractor’s front, who then hands miserable sums of money upon being paid to a few induced members of the communities. He thereafter shares the large chunk of proceeds from sub-contracts reserved for the indigenes with his cohorts at SPDC/Saipem.”

He said that there are unwarranted intervention and attempts to take over the local administration of the communities to continue to push forward the alleged interests.
“Unfortunately, Saipem Consortium now holds an unenviable record of orchestrating internal strife and violence in almost all communities where it operates in the western flank of the Niger Delta due to the activities of officials.

“If Shell fails to heed the communities request to withdraw Saipem and stop contracting further projects to it in our area, then we shall assume that SPDC no longer desires to undertake its projects at the three flow stations,” Fufeyin added.