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NPA, LADOL collision deepens, as duo rain accusations over contract

The NPA has revoked the agreement it had with Lagos Deep Offshore Logistics Base (LADOL) after accusing the company of breaching the agreement.

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Nigerian Ports Authority, NPA, Hadiza Bala-Usman, Maritime, Ports, Badagry deep seaport, NPA, LADOL collision intensifies, as they throw counter-accusation over contract 

The Nigerian Ports Authority (NPA) has revoked the agreement it had with Lagos Deep Offshore Logistics Base (LADOL) after accusing the company of breaching the agreement.

LADOL has, however, hit back at the NPA, stating the cancellation of the contract was illegal.

The controversial contract was a land lease agreement for 121 hectares of land near the Light House Beach, Tarkwa Bay, Lagos. The port authority said LADOL made certain decisions that contravened its agreement.

NPA, LADOL collision intensifies, as they throw counter-accusation over contract 

LADOL

According to a report, LADOL was prohibited from subletting any part of the property, but the company went ahead to sublet a portion of the land. NPA discovered during an investigation that without approval, LADOL had executed a sublease dated September 13, 2013 with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria).

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This prompted NPA to draw the attention of LADOL’s parent company, Global Resources Management Limited, stating in a letter signed by the agency’s General Manager, Land and Asset Administration, Yusuf Ahmed, that, “Clause 4.5 (a) of the agreement which prohibits the lessee (LADOL) from subletting any part of the premises without a written approval of the Lessor (NPA).”

Ii was disclosed that such decision is a breach of contract and “shall result in the automatic cancellation of this lease.” The letter further stated that the company’s “actions in that regard led to the current impasse with resultant negative attention within and outside the country.

“Consequently, the authority has reviewed the events and decided to exercise its rights under the lease and hereby revokes it with immediate effect.”

LADOL was also said to have sublet part of the land to an American company called Africoat Nigeria Limited.

[READ MORE: SAHCO, Arik Air renew contract to boost services)

Is LADOL shortchanging FG? Apart from the accusation of breaching contract, NPA also alleged that LADOL had been holding back on its payment to the Federal Government, as the company was paying less than it collected on rent.

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NPA intervened in order to protect SHIN’s fabrication and integration yard. It was reported that $270 million had been borrowed to build and restore investors’ confidence.

LADOL condemns NPA’s decision: The company said the decision by NPA to revoke their agreement was illegal and wrong. LADOL also described it as unconstitutional and should be null and void.

In a bid to fight the contract cancellation, LADOL and Global Resources Management Limited have listed Samsung Heavy Industries Nigeria, the Nigerian Export Processing Zones Authority, Oil and Gas Export Free Zone Authority and SHI-MCI Free Zone Enterprise as defendants after filing a lawsuit.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

2 Comments

2 Comments

  1. Anonymous

    February 20, 2020 at 8:14 am

    Good work you are doing here. Pls, the caption (LADOL) of the 2nd photo used in the article “NPA, LADOL collision deepens, as duo rain accusations over contract”, is not correct. That photo is “EGINA FPSO” and should have been captioned as such please.

    • Victor Ibeabuchi

      February 27, 2020 at 6:35 am

      Beautiful observation Sir. I would have suggested that a drone should have been used in capturing the LADOL site as at the time of filing this report. Many Lagosians don’t really know where the port facility is located.
      Secondly, how come that it is now that the Samsung Heavy Industries Limited is gaining popularity that the NPA is intervening?
      There’s something more to this cancellation of contract.

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Commodities

Five oil majors reduce value of their assets by $50 billion in Q2

Energy demand at one point was down by more than 30% globally.

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Five oil majors (including Exxon Mobil and British Petroleum) reduced the value of their assets by $50 billion in Q2, 2020. They also reduced their production rates as the COVID-19 pandemic caused a downward trend in energy demand.

What this means: The cut in asset valuations and reduction in crude oil production by these oil majors showed the depth of damage the COVID-19 pandemic caused on the global energy sector in Q2, 2020.

Energy demand at one point was down by more than 30% globally and still remains below pre-pandemic levels.

Some of these conpanies’ executives said they took these austerity measures because they expect demand to continue to be on the downward trend in the meantime. This is in view of the fact that people around the world are traveling less, even as many global industries are not in full capacity. The pandemic has already killed more than 700,000 people.

Of those five oil majors, only Exxon Mobil (XOM.N) did not book sizeable impairments, Reuters reported. However, an ongoing re-evaluation of Exxon Mobil plans could lead to a reasonable amount of its assets being impaired, and signal the removal of 20% or 4.4 billion barrels of its oil and gas reserves.

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Oil major BP (BP.L) took a $17 billion hot. It said its plans in the coming years would be a focus on renewables and fewer fossils.

About two weeks ago, Nairametrics reported how Exxon Mobil and Chevron posted their worst losses in modern history, as the COVID-19 pandemic and a glut in crude oil reduced the demand for energy products in the second quarter of 2020.

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Hospitality & Travel

US gives reasons it warned citizens against travelling to Nigeria, lists 12 high risk states

The US government has issued a level 3 Travel Health Notice for Nigeria due to COVID-19.

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Donald Trump, What does Iran’s war with America mean for Africa?, US to stop issuing visa for Birth Tourism, Trump Travel Ban List: Why Nigeria should be excluded  , US spends over $5b in health assistance to Nigeria in 20 years, gives $32.8m for covid-19, Oil Is Back

The United State Government has advised its citizens against travelling to Nigeria due to the Coronavirus pandemic, terrorism, civil unrest, kidnapping, widespread inter-communal violence, and others.

This warning is contained in a travel advisory statement that was obtained from the United State Department of State website.

The statement also disclosed that the Centre for Disease Control and Prevention (CDC) had issued a level 3 Travel Health Notice for Nigeria due to the Coronavirus pandemic. Also, some parts of the country have increased risk.

“Reconsider travel to Nigeria due to Covid-19. Reconsider travel to Nigeria due to crime, terrorism, civil unrest, kidnapping and maritime crime. Some areas have increased risk.’

‘’Do not travel to; Borno and Yobe States and Northern Adamawa State due to terrorism; Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States due to kidnapping; Coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt) due to crime, civil unrest, kidnapping and maritime crime,’’ the statement said.

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It stated that violent crimes such as armed robbery, assault, carjacking, kidnapping, and rape, have become common throughout the country. As such, US citizens were advised to exercise extreme caution throughout the country due to the threat of indiscriminate violence.

“Terrorists continue plotting and carrying out attacks in Nigeria, especially in the Northeast. Terrorists may attack with little or no warning, targeting shopping centres, malls, markets, hotels, places of worship, restaurants, bars, schools, government installations, transportation hubs, and other places where crowds gather.

“Sporadic violence occurs between communities of farmers and herders in rural areas.’

The US government acknowledged the fact that it has limited ability to provide emergency services to US citizens in many parts of Nigeria due to the security conditions.

Going further it stated, “Do not travel to Borno and Yobe States and Nothern Adamawa. Terrorist groups based in the Northeast target churches, schools, mosques, government installations, educational institutions and entertainment venues. Approximately two million Nigerians have been displaced as a result of the violence in Northeast Nigeria.

“Do not travel to Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States. The security situation in Northwest and Northeast Nigeria is fluid and unpredictable, particularly in the states listed above due to widespread inter-communal violence and kidnapping.

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“Do not travel to the coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt). Crime is rampant throughout Southern Nigeria, and there is a heightened risk of kidnapping and maritime crime, along with violent civil unrest and attacks against expatriate oil workers and facilities.’’

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Energy

World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits

Saudi Aramco is the national energy company of Saudi Arabia.

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oil company, Just copy Saudi Aramco

The world’s largest oil company, Saudi Aramco reported a 73% drop in profit Q2,2020 profit and still kept its plans to pay $75 billion in annual dividends in a report credited to Bloomberg News

Saudi Aramco reported a plunge in profits for Q2,2020 of 24.6 billion riyals compared to 92.6 billion riyals recorded in the same corresponding year.

Aramco will pay a Q2,2020 dividend of $18.75 billion, most of it to the government of Saudi Arabia, the company’s major shareholder.

READ MORE: Apple becomes world’s largest public listed company, valued at $1.82 trillion

The plunge in profit was due mainly to “the impact of lower crude oil prices and declining refining and chemical margins,” Aramco said in the statement to the Saudi stock exchange.

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“Strong headwinds from reduced demand and lower oil prices are reflected in our second-quarter results,” said Chief Executive Officer Amin Nasser.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”

READ ALSO: Shoprite’s owners to leave Nigeria after 15 years

Quick fact; Saudi Aramco is the national energy company of Saudi Arabia. It produces five grades of crude oil and natural gas liquids.

It also produces refined energy products that include liquefied petroleum gas, ethanol, naphtha,  and other products.

It exports about 75% of its crude oil to foreign markets, most often with its oil tankers. Saudi Aramco has access to crude oil reserves of about 260 billion barrels, the largest in the world.

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READ ALSO: Nigeria’s Petroleum minister and Saudi Aramco discuss investment options

OPEC’s largest oil exporter, Saudi Arabia has been hit hard by global economic restrictions aimed at curbing the spread of COVID-19.

The Saudis make most of its revenue from crude oil, which has dropped 33% in value this year.

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