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Protests As NNPC 'Awards' $18.48m Contract Without Following Due Process


NNPC took it upon themselves to award the contract, claiming that an executive order issued from the Presidency demands that the contract be awarded immediately.

The terms of reference of the contract is meant to last for five renewable months, coming with some other conditions spelling out penalties that may attend loss of products or breaches to parts of the length of the pipeline," one of the officials stated.

Controversy is said to be currently trailing the award of oil facilities surveillance contract to a the tune of $18.48million by the Nigerian National Petroleum Corporation (NNPC), without adherence to the nation's Public Procurement Act, which is a violation of extant rules.

SaharaReporters reliably learnt that on September 26, 2018, NNPC approved the contract for the security surveillance of the 87-kilometre Trans-Forcados Pipeline (TFP) to Ocean Marine Solution Limited, owned by a Benin business mogul, Captain Hosa Okunbo, at $18.48 million.

Expressing displeasure over the way the contract was awarded, officials of the Joint Venture Partners who spoke in confidence with SaharaReporters, said the contract was done in secret and characterised by fraud, alleging that it was in violation of the Public Procurement Act, the statutory rule guiding how public contracts and services are awarded. As a result, they have refused to agree to the new contract terms with Ocean Marine because of the "inflated value".

One of the officials said: "The contract has started raising dust in various circles. We are the operators of the asset; we refused to agree to the new contract terms with Ocean Marine because of the inflated value which will eventually be paid by us through ‘Cash Call’. NPDC could not proceed with signing off on the contract because we, the Joint Venture Partners, had declined.

"Following the decline, NNPC took it upon themselves to award the contract, claiming that an executive order issued from the Presidency demands that the contract be awarded immediately. The terms of reference of the contract is meant to last for five renewable months, coming with some other conditions spelling out penalties that may attend loss of products or breaches to parts of the length of the pipeline."

Another official who spoke to SaharaReporters said: “There are many questions on the lips of the people demanding answers, such as what is the rational for re-awarding a running contract to a new contractor, at a value almost four times the rate it had previously been awarded to the former contractor? Who issued the said Executive Order? Why the secrecy and why shut out others who could deliver same service at a far lesser bid?

"Why exclude the previous contractor, who had delivered an impeccable service, because there were no negative incidents on the facilities for the period the former contractor ran it. The NNPC, with all its baggage, must provide answers to these questions. I guess you are aware that there have been a couple of very shady and questionable events that have been reported out of the corporation in the last few months, bordering on the question of non-remittance of accruals as well as awards that fell short of meeting due process.


"I think President Buhari should take another look at the way that place is being run by those he has placed in charge. NNPC is directly under his watch and things like this can’t be sailing every time and he should expect us to continue believing he is still a man of integrity."

Our correspondent gathered that the Joint Venture Partners, including Heritage Energy Operational Services Ltd and Shoreline Natural Resources, are said not to be in good working relationship with the Nigerian National Petroleum Corporation (NNPC), over the alleged fraudulent manner the contract was awarded.

Speaking on the process leading to the approval of the contract, an official of the Delta State Government, specifically in the Ministry of Justice, who preferred not to be named, said the process was full of "sharp practices".

"You see this issue concerning the award of the contract, which was among the issues that made the youth lead a protest to the Government House in Asaba a few weeks ago, is a very pathetic and controversial one. Our ministry has been relating with some of these Joint Venture partners and along the line, we got know that the contract was a backdoor deal among few individuals in NNPC," he said.

A former House of Assembly member from the Delta South senatorial district and a chieftain of the Peoples Democratic Party (PDP), also with information about the contract, raised several objections over the manner the contract was awarded.

He said: "This is in violation of the Public Procurement Act, which is the statutory rule guiding how public contracts and services are awarded. First, it is stipulated that no contract from the tune of $20million can be awarded by any MDA without deliberation and the express permission of the Federal Executive Council. This approval by the NNPC, although cleverly spread so that it will look like it has not reached the $20million threshold, has violated that act.

"No one is happy over the arbitrary and unexplained inflation of the contract sum, as well as the choice of the NNPC to beat the standing rule that no ministry, department and agency can award a contract that is up to $20million in value; others are expressing their concerns as well. This is just a conduit pipe contract to fund the APC campaigns in the 2019 general elections."

In his remarks on the matter, spokesman of the Ijaw Youth Council (IYC), Daniel Dasimaka, highlighted the inherent security threat associated with the new contract approved by the NNPC to Ocean Marine, adding that they might not have paid attention to the serious threat this poses to the peace and security of the communities and Delta State in general.

"There's a running contract, approved by the operators of the assets to a contactor that has been doing an awesome job on the assets; no reports of negative incidents and the communities are happy. Imagine the sort of tension that has greeted this new approval in just a few days, the silent and cold wars. This is a latent crisis situation on our hands and I won't buy the narrative that they never envisaged a war from this.

"Why award an already running contract to another company and the contract now inflated to about five times the rate of the initial contract. Awarding a security job to two different companies, in an area that is considered volatile is a perfect recipe for chaos and a sabotage to the relative peace of the area. Polarizing the youth bodies and ex agitators is only a recipe for renewed militancy.

"The mindset of the youth is often times focused on destroying or attacking oil infrastructure to gain relevance and recognition. NNPC should not create the opportunity for this to happen.

My appeal will go first to the GMD of the NNPC to have a second look at this security-risk of an action. Why approve such a huge contract without the input of the operators? Is it for lack of better coordination or is there something that the eyes mustn't see?

The IYC spokesman, therefore, called on all security agencies, the DSS, Nigerian Armed Forces and the Police to address the situation.

Youth and ex-militants from the 111 communities who are hosts to OML 30 assets had raised the alarm over an impending chaos in their communities and the state, on the allegation that the NNPC's alliance with Ocean Marine was about to deprive them of their means of livelihood.

When contacted, Ndu Ughamadu, Group General Manager, Group Public Affairs Division of the NNPC, declined to comment immediately our correspondent introduced the issue, saying "Please I am in a meeting, call back in an hour." When a call was put across to him after an hour, he asked our correspondent to redirect his inquiry to his WhatsApp line, which was done. However, he did not responded.

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