The Nigerian arm of Samsung Heavy Industries is in talks to resolve a court action launched by Lagos Deep-sea Offshore Logistics (LADOL) base where the company has been building a floating oil platform for Total, Samsung Heavy said on Friday.
“We are in discussions to iron out any misunderstanding or issues raised between the parties,” a Samsung spokesperson said in a statement sent to Reuters on Friday.
“We are yet to come to the resolution or conclusion but we hope to resolve amicably for our further businesses together.”
LADOL sustainable industrial free zone refused to renew Samsung’s sublease to use a shipyard and filed a court action last week, accusing the company of breaching the terms of their agreement.
LADOL’s allegations included that Samsung breached the conditions of service for Nigerian workers, and violated both customs and immigration procedures.
Responding to Samsung’s statement, LADOL said it also hoped for an amicable resolution to the dispute, but added: “Failure to maintain the conditions and requirements for operating in the Free Zone will not be tolerated.”
Samsung Heavy Industries, one of the world’s largest shipbuilders, says that through its joint venture with LADOL it has invested $300 million to help build a floating oil platform for Total’s Egina oil field.
Total describes the field as one of its most ambitious ultra-deep offshore projects.
The project is expected to produce an estimated 200,000 barrels of oil per day, representing about 10 per cent of Nigeria’s total capacity.
LADOL had recently started a court action against Samsung Heavy Industries Co. Ltd. and said it was ending ties with the South Korean ship-builder.
“Samsung’s contract expired and due to the failure to meet the minimum standards required to qualify for an operating license, it has not been renewed,” a spokesman for Ladol said in a response to questions. LADOL has filed a suit against the company at the Federal High Court in Lagos, Nigeria’s commercial capital, he said.
A Samsung Heavy Industries spoke didn’t immediately respond to an email requesting comment.
Samsung completed the construction of one of the world’s largest floating oil platforms for Total SA at LADOL’s base in Lagos last month. It built the $4 billion Egina vessel, designed to hold 2.3 million barrels of oil, in South Korea and Nigeria, before it set sail for a deep-water field offshore the Niger Delta coastline.
The project was seen as a test of the Federal Government’s drive to build an oil-services industry and get more international energy companies to use local firms.
Amy Jadesimi, a former Goldman Sachs Group Inc. banker who is LADOL’s managing director, said in a May interview that she would probably bid for similar upcoming work from the likes of Royal Dutch Shell Plc and Eni SpA once Egina was finished.
