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Oil firms sue FG over drilling charges

17 May 2013, 11:01

Lagos - Three drilling firms on Thursday sued the Nigerian Ports Authority (NPA) over charges imposed on them for their activities in the Exclusive Economic Zone (EEZ).

The suits, instituted before Justice James Tsoho of the Federal High Court, Lagos, were filed by Transocean Sedco Forex, Noble Drilling and Pacific International Drilling.

The plaintiffs stated in their statement of claim that NPA imposed on them charges running into millions of dollars for drilling within the EEZ.

They said that four major oil industry operators - Shell, Mobil, Chevron and Total -   engaged their services to prospect for oil within the EEZ.

The plaintiffs said as drilling companies they took their rigs directly from location at the EEZ because they did not fall within the definition of "cargo", which must be discharged at the conventional ports.

They also stated that since the minister of Transport did not declare the EEZ as a compulsory `pilotage’ district, they were not under any obligation to pay the pilotage dues.

However, NPA in its statement of defence stated that under the relevant international agreements, the government had the right to prospect for mineral and other resources in the Economic Zone, which is about 200 nautical miles from Nigeria’s coastline.

The defendant further stated that when the oil majors engaged the services of the plaintiffs to drill the oil well, the plaintiffs took their rigs directly to the EEZ without the relevant permit.

According to NPA, the rigs are usually brought in from abroad but before they are moved to the EEZ, the drilling companies must obtain temporary import permits to bring them in as cargo.

NPA said this was to prevent the payment of import duties by the drilling companies.

The agency also argued that under the provisions of the Customs Act, the rigs should be discharged at regular ports before being taken to the offshore drilling sites in the EEZ.

The defendant stated that the only exception to the rule was when the drilling companies obtained waivers to take the rigs directly to the offshore sites, which they did not get.

The defendant, therefore, argued that the drilling companies must pay the dues as stipulated under the Compulsory Pilotage Order of 1996, which declares the EEZ as compulsory pilotage district.

The counsel to NPA, Mr Ame Ogie, filed a preliminary objection, challenging the competence of the suit, and urged the court to strike it out.

The court adjourned the case to September 18 for hearing.


Tags oil

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