BURSTED! How NNPC Fraudulently Awarded $18.48 Million Surveillance Contract Without Due Process


A monumental fraud is allegedly said to have rocked the Nigerian National Petroleum Corporation (NNPC), following the alleged fraudulent award of oil facilities surveillance contract amounting to $18.48 million to Ocean Marine Solution Limited, owned by one Captain Hosa Okunbo.

The contract which is already generating protest, HardReporters gathered that due process was not observed, especially the Public Procurement Act and did not have the blessing of the Federal Executive Council, before the security surveillance of the 87 kilometer Trans-Forcados Pipeline (TFP) was given to Ocean Marine.

It was learnt that the Joint Venture Partners, such as the Heritage Energy Operational Services Ltd and Shoreline Natural Resources, were kept in the dark in the award of the contract.

According to the terms of reference of the contract, it 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.

Our correspondent learnt that those concerned with due diligence in governance, especially as it affects the nation’s oil and gas sector, have raised the red flag 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 $20 million in value, others are expressing their concerns as well.

Reacting to the process leading to the approval of the contract, a youth leader in Delta state, who is also a transparency crusader, who pleaded for anonymity, raised several objections over the manner the contract was awarded and the unusually inflated price tag placed on it.

“Number one, this is in violation of the Public Procurement Act, which is the statutory rule guiding how public contracts and services are awarded. It stipulates that no contract from the tune of $20 million 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 knocked the $20 million threshold, has violated that act.

“Furthermore, the operator of the asset, Heritage Energy Operational Services Ltd and Shoreline Natural Resources, as shrewd business people, have refused to agree to the new contract terms with OCean Marine because of the inflated value which will eventually be paid by them through ‘Cash Call’. When NPDC could not proceed with signing off on the contract because the JOint Venture Partners had declined, NNPC took it upon themselves to award the contract claiming that an Executive Order issued from Presidency demands that the contract be awarded immediately.

“There are many questions they have to answer; 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 others who could deliver same service at a far lesser bid out? Why exclude the previous contractor, who had delivered an impeccable services because I gathered that there were no negative incidences 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 question events that have been reported out of the corporation in the last few month, bordering on 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. The law of vicarious liability calls him to stand here”, he said.

Also speaking on the development, the spokesman of the Ijaw Youths Council (IYC), Daniel Dasimaka, highlighted the inherent security threat associated with the new contract approved by the NNPC to Ocean Marine.

According to him, “they might not have paid attention to the serious threat this poses to the peace and security of the communities and Delta state as a whole. 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 incidences and the communities are happy. Imagine the sort of tension that has attended 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 a better coordination or is there something that the eyes mustn’t see?. I will also call on all security agencies; the DSS, Nigerian Armed Forces and the police to step in now and stop this potential security risk. I am concerned, I don’t want them to turn my community and state to another war zone”, Dasimaka warned.

At the community level, thousands of youths and ex-militants from the 111 communities who are hosts to OML 30 assets have raised the alarm over what they described as an impending chaos in their communities and the state.

The youths, had in a recent protest to the Delta state Government House in Asaba, alleged that the NNPC alliance with Ocean Marine was about to deprive them of their livelihood, render thousand of them jobless and in effect fuel a new round of unrest in the communities.

“We have come to peacefully protest what we consider a violent infringement and a deliberate attempt to render thousands of Delta state youths jobless by a callous and ruthless political jobber, backed by the heartless cabal in the presidency.

“The surveillance and protection of Trans-Forcados Pipeline taking crude oil from our communities to the Forcados Terminal has been our duty, which has put food on the tables of thousands of our homes and ensuring peace and tranquility in many communities of our state in the last two years.

“Your Excellency, we feel that this is the point at which you, as the Chief Security Officer of our dear state, must rise up to take steps to nip this madness in the bud to avert the impending danger that this greedy set of ‘soldiers of fortune’ is about to impose on not just our communities, but also our dear state. You may wonder how this is our concern.” the protesters had said.

As at the time of filing this report, when our correspondent reached out to the Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, he declined comment and asked our correspondent to redirect his queries to his WhatsApp line, which was done but he never responded.


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