IT is looking brighter, becoming hopeful for truly Nigerian companies in the oil and gas industry, if feelers from the Federal High Court, Ikoyi, Lagos, presided by Justice Buba, becomes the yardstick to be used in measuring contractual relationships between international and local practitioners in the number one industry in Nigeria.

For several weeks, OFSERVE Nigeria Limited, a fully Nigerian owned oil and gas services company, with core competences in drilling services and facilities maintenance and Weatherford International with their Nigerian subsidiary, Weatherford Nigeria Limited, the former, being a Texas based international oil and gas servicing company, have been at the FHC, Ikoyi, pursuing technicalities on who is legally liable and who is not, until the judge stopped the legal representatives of Weatherford Nigeria Limited by setting a date to hear the prayers of OFSERV Nigeria Limited.

Background: In their statement of claims, OFSERVE Limited aver that, in May 2014, it submitted a technical tender to provide measurement while drilling (MWD), logging while drilling (LWD), and directional drilling (DD) services for Shell Nigeria Exploration and Production Company (SNEPCO).

During a subsequent facility inspection in November 2014, representatives from SNEPCO and the National Petroleum Investment Management Services (NAPIMS – a corporate unit of the national oil & gas regulatory company) strongly suggested that OFSERV form a partnership with one of the large international oil and gas services companies to boost its chances of progressing on the tender.

In its Statement of Claims, OFSERV averred that, Weatherford had been operating in Nigeria since 1975, but its local operations and accompanying revenues had been marginal when compared to its main competitors.

This is primarily due to its absence in the Nigerian drilling services and wireline markets, which together is estimated to be worth a combined value of $1 billion per year. When OFSERV approached Weatherford about the SNEPCO opportunity, it seemed like a perfect opportunity Weatherford would be willing to take and the company seemed to immediately get on board. The multinational oil firm showed high interest in the offer by preparing a letter of intent within 48 hours through its Nigerian subsidiary.

Continuing, the statement proffered that, having done exchanges, Weatherford induced OFSERV to believe that they were interested in a substantive partnership with OFSERV and in the process got OFSERV to commit significant man-hours and resources to advance their quest to enter the Nigerian drilling services market. At Weatherford’s request, OFSERV initiated discussions with their drilling services contacts at over 10 operating companies to introduce the OFSERV/Weatherford alliance. Discussions with one of the oil companies; Sterling Oil, rapidly progressed to the point where Sterling requested for a commercial proposal.

Unprofessionalism: Speaking further, Soyinka Sowoolu, OFSERV Business Development Executive, said, “We shared price intelligence with Weatherford to help them in submitting a competitive commercial offer. Although, Weatherford had done business with Sterling before, they were not in the directional drilling business; they did not have the service in Nigeria.

Draft agreement

“OFSERV also facilitated meetings to introduce the OFSERV / Weatherford alliance to Shell Petroleum Development Company, both at SPDC offices in Port Harcourt and at Weatherford facilities in Houston, Texas.’’  “Following the introductions to SPDC by OFSERV, Weatherford emailed SPDC, confirming a presentation initiated by OFSERV (which they discouraged OFSERV about) was going to hold, and sent details about their capabilities. OFSERV was not copied in any of the emails.

Before this, a draft agreement had been sent to OFSERV by the company but, Soyinka Sowoolu said to OFSERV’s surprise, the content was different from their earlier gentleman’s agreement.

According to him, Weatherford, at some point, sent an email to OFSERV, saying they would prefer the partners focused on Sterling Oil since there was no subsisting contract with SPDC. “Little did we know that they had gone behind our back to contact SPDC. Friends from SPDC Drilling department, confounded, intimated us of the development.”

The OFSERVs statement claimed the draft agreement sent by Weatherford suggested that OFSERV would only be paid certain dismal percentages on contracts won and would not have the opportunity to execute any part of the work scope.

Culled from Vanguardngr