Court moves to rescue over $800m investment in LADOL facility in Lagos

The Lagos Deep Offshore Logistics Base (LADOL), a wholly private indigenous owned and managed Industrial Free Zone in Nigeria, has obtained an injunction from the Federal High Court in Lagos restricting the Federal Government from implementing the directive that all oil and gas related cargoes coming into Nigeria must be discharged only at Intels’ facilities either in Onne, Warri or Calabar.

The court also restricted the Federal Government from implementing the second directive that stated that LADOL’s joint venture partnership project with Samsung Heavy Industries for the development of Egina FPSO integration and fabrication facilities be moved from Lagos to Bayelsa, or to an Intels facility until a suitable facility is built in Bayelsa.

Both directives dated April 27, 2015, were issued in a letter written to LADOL by the Nigerian Ports Authority (NPA), and signed by AR. Mohammed, general manager, Capital Project, on behalf of the managing director, Sanusi Lamido Ado Bayero on the latter’s first day of resumption of office.

According to the directive, vessels coming into the country with oil and gas related cargoes aside from petroleum products, must first go to NPA concessioned terminals in Onne, Warri or Calabar (all owned by Intels) to be cleared by all the relevant agencies, pay duties and obtain releases before proceeding to terminals like LADOL for final discharge.

The move to enforce this directive, industry watchers describe as unhealthy monopoly capable of bringing about cargo diversion to ports in neighbouring countries, high cost of shipping, and lack of human capacity development.

“This move is creating a monopoly that is anti-people, and not in the interest of the economy. People should be allowed to have a choice of where to take their cargoes,” said Olayiwola Shittu, national president, Association of Nigerian Licensed Customs Agents (ANLCA), while commenting on the issue.

Commenting on the injunction, Fidelis Oditah, a senior advocate of Nigeria, who filed the action on behalf of LADOL, said the injunction ensured that all related agencies, including NPA, must allow vessels and cargoes to proceed directly to any port or approved facility of choice, including oil and gas cargoes, so as to protect the Nigerian indigenous maritime sector.

The injunction further stated that vessels from foreign waters could berth directly at LADOL Free Zone in line with LADOL’s designation as a Deep Offshore Logistics Base, permitted to receive two international vessels each week.

It further prevented the passing of the amendments to the Oil and Gas Export Free Zones Act, which sought, among other changes, to: – Impose a foreign owned monopoly on the movement of oil and gas cargoes in Nigeria; transfer control of 12 Free Zones in Nigeria currently under the NEPZA Act to the control of the Oil and Gas Free Zone, which is controlled by the same foreign-owned monopoly company.

LADOL is one of Nigeria’s several 100 percent indigenous companies operating in the oil and gas industry, its private investors built a green-field swamp into a $500 million industrial village. An additional $300 million has now been spent building West Africa’s largest vessel fabrication and integration facility, which is on-course to create 50,000 local jobs.

The facility, which offers 24/7 operations, is custom built to provide services for high value industrial projects, which range from deep offshore logistics support and vessel fabrication to electronics manufacturing and agricultural processing for exports.

UZOAMAKA ANAGOR