9th October, 2023
By Nathan Nwakamma
Service providers in the Nigerian oil industry under the aegis of Coalition of Indigenous Contractors of Agip (CICA), on Sunday, said the Italian oil company must settle its debt obligations to them before proceeding with its ongoing plan to sell its assets to Oando plc.
The contractors who threatened to occupy all facilities belonging to Agip in the Niger Delta over the issue said the company should have discussed the modalities for payment of all its outstanding debts before initiating the plan to sell off its assets.
CICA said this in a statement on Sunday by its Chairman, Ifeanyichuku Olisa, and Secretary, Chief Felix Alumona.
The group lamented that Agip owed its members huge amounts of money for jobs they did for the company.
According to the statement, it would be inhuman and a failure to adhere to global best practices for the company to allow the deal to sail through without settling all debts owed to the contractors.
The contractors called on President Ahmed Bola Tinubu to wade into the transaction and ensure that all outstanding debts were paid before the conclusion of the acquisition.
They also appealed to security agencies to prevail on Agip and NNPC to settle the outstanding debts to avoid compelling host communities and other affected stakeholders to resort to self-help.
The contractors said: “We recently heard that NAOC has been acquired by Oando and the acquisition process is ongoing.
“Whilst we hold no objection to the purported acquisition, we are concerned about what happens to the monies NAOC owes all its contractors.
“It is also worrisome to hear from NAOC that the other joint venture partners, NNPC and OANDO, have not consistently remitted their joint venture contributions, cash calls, which invariably has led to humongous sums of money being owed to local contractors, comprising landlords to NAOC facilities, service contractors and general contractors, who provide services to NAOC”.
The contractors said some of the debts had been owed since 2020, adding that loans were obtained from the banks by contractors to execute the jobs.
CICA said: “What becomes of the monies being owed these contractors, many of whom sought bank loans and invoice discount facilities, and now at serious risk of severe financial losses?
“We call on our ever-listening President Bola Tinubu to prevail on NNPC and OANDO, to as a matter of save our soul (SOS), intervene and save NAOC contractors from financial losses.
“Government regulatory agencies, as well as all security agencies, should please prevail seriously on NNPC/OANDO to please save the contractors from impending calamity and to forestall landlords and host community contractors from resorting to self-help which will include, but not limited to, ensuring the stoppage of all NAOC operations in our host communities”.
Although NAOC officials declined comments on the development, a Spokesperson at Eni, the Italian parent company to NAOC, pledged to revert with a response but has yet to do so.
Italy’s Eni had last month announced that it has agreed to sell its Nigerian unit Agip Oil Company Ltd (NAOC) to Oando plc.
The completion of the acquisition was subject to Ministerial Consent and other required regulatory approvals.
But the NNPC Limited had also queried the transaction, saying NAOC did not obtain its consent before announcing the deal with Oando PLC.
The Managing Director of NNPC E&P Limited, Ali Muhammed Zarah, in a letter to NAOC said the sale of the assets to Oando without their consent is a breach of its Joint Operating Agreement it signed on July 1991 relating to NAOC/NEPL/OOL Joint Venture.
However, the spokesperson of NNPCL, Garba Deen Muhammad said the letter did not indicate an objection to the transaction.
“NEPL is only drawing attention to certain important clauses in the JOA, which might have been overlooked in error. Adherence to those clauses will protect the transaction now and in the future.”