Ocean Marine Solutions Limited (OMS), an asset protection company operating in Nigeria’s oil and gas sector, has accused Shoreline Natural Resources Limited and Eraskorp Nigeria Limited of being behind what it described as a campaign aimed at frustrating its proposed involvement in the security and surveillance of the Trans Forcados Pipeline (TFP).
In a statement issued by the management of the company, OMS said the controversy followed its invitation by the Nigerian National Petroleum Corporation (NNPC) to take over responsibility for the protection of the strategically important pipeline.
OMS alleged that some interests connected to the existing surveillance arrangement were opposed to its proposed involvement because of concerns that its approach could expose weaknesses in the management of the pipeline.
The company, however, stressed that the allegations contained in its statement were its response to what it described as attacks on its reputation.
The claims against Shoreline and Eraskorp were not presented as findings of a court or regulatory investigation.
OMS Defends Its Track Record
OMS said it had established a record in the protection and maintenance of critical oil infrastructure, particularly on the Escravos-Warri and Bonny-Port Harcourt crude oil pipelines.
According to the company, it invested substantially in the rehabilitation of the Escravos-Warri pipeline before receiving a formal contract, describing the initiative as a “proof of concept” designed to demonstrate that the pipeline could be restored and operated successfully.
OMS also said its work subsequently extended to the Bonny-Port Harcourt pipeline following an approach by NNPC.
The company stated that the two pipelines were formally recommissioned in April 2016 in the presence of the Minister of State for Petroleum Resources and the then Group Managing Director of NNPC.
It further claimed that, as of November 2018, more than 60 million barrels of crude oil had been delivered through the pipelines to Nigerian refineries under its security and maintenance arrangement.
OMS attributed the reported performance to what it called its “Community Engagement Model for Asset Protection”, which involves the participation of host communities, employment opportunities, training and local economic development.
Invitation To Secure Trans Forcados Pipeline
According to OMS, it did not initially seek the Trans Forcados Pipeline contract but was invited by NNPC because of the security challenges affecting the facility and its previous performance on other pipelines.
The company described the TFP as a critical component of Nigeria’s crude oil infrastructure, with a stated capacity of between 200,000 and 240,000 barrels per day.
OMS argued that the pipeline’s security was of significant national importance because of its role in transporting crude oil from major producing assets.
It maintained that its proposed engagement was based on its previous experience rather than political or commercial influence.
Dispute Over Pipeline Losses
A major part of the controversy centred on alleged crude oil losses and downtime associated with the Trans Forcados Pipeline.
OMS claimed that more than 11 million barrels of crude oil had been lost on the line, alongside approximately 60 days of downtime, which it valued at about $800 million at the time.
The company attributed the alleged losses to vulnerabilities in the pipeline and what it described as illegal valve insertions used by suspected oil thieves and vandals.
OMS further questioned why the existing surveillance arrangement had allegedly been allowed to continue despite the reported losses.
The allegations concerning the volume and value of losses were presented by OMS as part of its argument for a different security model.
They should therefore be distinguished from independently established findings.
OMS Rejects Allegations Over Its Contracts
The company also rejected reports alleging that NNPC had awarded it multiple pipeline surveillance contracts worth $9.9 million monthly.
The company also rejected reports alleging that NNPC had awarded it multiple pipeline surveillance contracts worth $9.9 million monthly.
OMS said that, at the time, it was only operating under contracts covering the Escravos-Warri and Bonny-Port Harcourt pipelines.
It also dismissed claims that its contracts had been awarded without following due process.
According to the company, its existing contracts had followed the applicable procurement procedures and were based on competitive processes and its “proof of concept” model.
OMS cited explanations attributed to NNPC concerning the proposed TFP arrangement, including references to provisions of the Public Procurement Act relating to emergency procurement and national security.
The company argued that the urgent need to prevent further crude oil losses and production deferment justified the proposed arrangement.
Shoreline, Eraskorp Claims Rejected
OMS specifically rejected allegations that its proposed involvement in the TFP was opposed by stakeholders, joint venture partners, operators and host communities.
It also denied claims that the proposed contract was three times more expensive than the existing arrangement involving Eraskorp.
According to OMS, the two proposed arrangements could not be directly compared because they involved different deployment structures, scopes, terms and responsibilities.
The company further disputed allegations concerning its performance on the pipelines already under its management, maintaining that its results could be independently examined.
OMS said its executive chairman and majority shareholder, Capt. (Dr.) Idahosa Okunbo, had built the company over several years and had operated in the oil and gas sector without, according to the statement, being indicted over his business activities.
Proposed New Model
OMS disclosed that it had not signed the proposed TFP contract at the time of the statement, citing the controversy surrounding the arrangement.
It nevertheless explained that the proposed agreement would operate under specific security plans and key performance indicators.
Under the model described by the company, OMS would have responsibility for protecting the pipeline and could be held accountable for breaches and crude oil losses.
OMS contrasted this with what it described as the previous arrangement, under which the surveillance contractor was not responsible for repair costs or losses resulting from breaches of the pipeline.
The company said the proposed arrangement was intended to ensure that contractors had greater responsibility for the performance of the infrastructure under their watch.
Host Communities And Employment
OMS also rejected claims that its proposed engagement would result in the loss of jobs for youths in host communities.
The company said it intended to employ local youths as part of its community engagement strategy, similar to what it claimed to have implemented on the Escravos-Warri and Bonny-Port Harcourt pipelines.
It described host-community participation as an important component of its asset protection model.
Call For Investigation
While defending its record, OMS called on relevant government and security agencies to investigate the circumstances surrounding the reported losses and downtime on the Trans Forcados Pipeline.
It urged authorities to determine who was responsible for the alleged losses and whether any individuals or organisations benefited from the activities surrounding the pipeline.
The company also called for attention to be paid to the relationship between Eraskorp and Shoreline and the circumstances surrounding the management and surveillance of the TFP.
OMS said the authorities should establish the facts surrounding the controversy rather than allowing competing claims from interested parties to determine the narrative.
The company maintained that it remained committed to protecting Nigeria’s oil infrastructure and supporting efforts to reduce crude oil theft, pipeline vandalism and other forms of illegal activity in the sector.
SIGNED: Management Ocean Marine Solutions Limited (OMS)
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