Oil Thieves Fight Back: Report Indicts Kola Karim’s Shoreline Limited & Eraskorp Limited

Over the years, Nigeria’s Oil and Gas sector has been tainted with scandals of varying degrees. The Malabu Oil Deal and the Halliburton bribe scandal readily come to mind when dirt in the oil sector is being spoken about. 

In a recent publication, obtained by The Anchor Online, Shoreline Natural Resources Limited and Ersakorp Nigeria were mentioned by Ocean Marine Limited in a squabble over the Trans Forcados Pipeline.

The text appears below:

Executive Summary

Ocean Marine Solutions Limited is Nigeria’s leading asset protection company dedicated to protecting our country’s natural resources from graft and illegal activities.
We have an unblemished reputation and our most prized asset is our ability to deliver value that benefits not just our clients but our fellow Nigerian citizens.
We have successfully eliminated illegal bunkering and oil theft on the Escravos – Warri and Bonny – Port Harcourt Crude Oil Pipelines.
If we accept NNPC’s invitation to takeover responsibility for the security of the Trans Forcados Pipeline, we will gladly put an end to the criminal abuse of another key part our strategic national infrastructure.
Fearful that we will put an end to their illegal racketeering, vested interests in the Trans Forcados Pipeline have engaged in a clumsy smear campaign in an effort to harm us and preserve the status quo. They will not succeed.
Ocean Marine Solutions Limited utterly refutes the outrageous, untrue, defamatory allegations bandied about concerning our operations.
We hold Kola Karim, Shoreline Natural Resources Limited and Eraskorp Nigeria Limited accountable for spreading these pathetic and malicious falsehoods. We will take the necessary legal and other steps to protect our reputation and expose the truth.
Ocean Marine Solutions Limited is not intimidated and the Nigerian people will not be fooled. Moreover, the eyes of the authorities are now on these crooked elements whose true purpose has been revealed.
We call upon the authorities to investigate the calamitous mismanagement of the Trans Forcados Pipeline and hold accountable those responsible.
Ocean Marine Solutions Limited will always continue to serve Nigeria as proud Nigerians.
1. IntroductionOcean Marine Solutions Limited (“OMS”) has never courted the limelight or chased headlines. As a result, many Nigerians may not have heard of us but all Nigerians benefit from the work we do protecting this country’s precious natural resources every day of the year. We are proud to be a values-driven Nigerian company looking after the Nigerian people’s interests.

However, in recent weeks, OMS has been the victim of a crude smear campaign orchestrated by desperate factions who are fearful that their lucrative abuse of the Trans Forcados Pipeline (“TFP”) will be over if OMS takes over responsibility for security and surveillance. Many sensible Nigerians will naturally ask, “is this a case of oil thieves and illegal bunkerers fighting back?”

OMS has identified Eraskorp Nigeria Limited (“Eraskorp”) and its backer, Shoreline Natural Resources Limited (“Shoreline”), as the architects of the attacks on OMS. Eraskorp is the hapless contractor that has presided over the abject surveillance and security of the TFP until now while Kola Karim’s Shoreline is the outfit that should long ago have dispensed with their services rather than promoting them in the face of dismal performance.

OMS will not be intimidated by defamatory slights on our integrity and we look forward to a bright future for the TFP. We will bring an end to the graft and illicit activities that have proliferated under Eraskorp’s watch and which done untold harm to ordinary Nigerians.

We take this opportunity to respond to the malicious attacks on our integrity and explain to our fellow Nigerians:

a. The history of the TFP
b. Who we are
c. Our involvement with the TFP
d. Efforts to intimidate OMS
e. The Future for the TFP
f. Questions for the Authorities

2. The Trans Forcados Pipeline
The TFP is a vital piece of Nigeria’s national oil infrastructure, which is capable of transporting 200,000 to 240,000 barrels of oil per day equivalent to 14% of Nigeria’s daily production.

Unquestionably, the TFP is the key to transporting crude oil from some of Nigeria’s largest and most prolific assets and it is therefore of fundamental national strategic importance.
The safety and protection of the TFP is of paramount interest to all Nigerians.

3. Ocean Marine Solutions Limited

OMS is Nigeria’s leading asset protection company dedicated to protecting the country’s natural resources from graft and illegal activities.

Capt (Dr) Idahosa Okunbo, Executive Chairman and majority shareholder in OMS, has built the business from scratch and we now employ more than 3,000 hardworking members of the Delta community.

Capt (Dr) Idahosa Okunbo, Executive Chairman and majority shareholder in OMS

A documentary providing more insight about our story will be shown this week on [insert details]. More information about OMS is available at www.ocean-ms.com.

Unlike Eraskorp (and others), OMS has a successful track-record of securing strategic national infrastructure and stopping illegal bunkering, vandalism and oil theft.

For example, NNPC spent over $150 million trying to revamp the Escravos – Warri crude pipeline before eventually resorting to moving crude by marine vessels. It is on record that not only did OMS rehabilitate the Escravos – Warri pipeline against the odds but did so while bearing all of the considerable financial risk in order to demonstrate that we could deliver on our promises. Only when we had invested $32 million and proved our concept by revitalizing the pipeline did NNPC award us a contract in line with best practices and benchmarks.

Our approach to Escravos – Warri, where OMS singularly carried the financial risk and burden associated with proving our concept is characteristic of our values. We succeeded because of our patriotism, dedication, capacity and enormous structures deployed on the line.

Following the successful delivery of Escravos – Warri, NNPC approached OMS to replicate the achievement on the Bonny – Port Harcourt pipeline. Our efforts led to the formal re-commissioning of those pipelines on 22 and 23 April 2016 by the Minister of State, Petroleum Resources and the immediate past Group Managing Director, NNPC.

Since April 2016, we have delivered 60,177,843 barrels of oil (and counting) to both refineries without any loss to the nation.

The practical success of OMS whether at Escravos – Warri or Bonny – Port Harcourt, or if we assume responsibility for TFP, is our “Community Engagement Model for Asset Protection”. The epicenter of OMS’ values are the company’s faith in the Nigerian economy and our commitment to Corporate Social Responsibility deliverables, including job creation, Local Economic Development of the host communities, training, and retraining of skilled workers and hitherto unskilled labourers. The qualification of our staff is reflective on the quality of our services.

OMS’ contributions to Nigeria’s economy within the oil and gas industry and our human capacity engagement and development activities in the Niger Delta region are legendary. Suffice to say that OMS is a reputable company that does not engage in any form of corrupt practices, economic crimes, financial crimes or acts of economic sabotage.

OMS associate companies and her promoters have never been involved in oil swap deals, crude oil sale, or engage in oil trade in the downstream sector nor being political jobbers without defined business structure or engagement.

4. Invitation to Help with the TFP

OMS did not seek out the TFP security and surveillance contract. We were approached and invited to render our services because of the dire security situation and because we have a reputation for delivering results.

In particular, OMS’ impressive record of performance on the Bonny – Port Harcourt and Warri – Escravos pipelines and robust community engagement has earned the trust of NNPC. Indeed, we are pleased to be recognised as the game changer in the restoration of Escravos – Warri and Bonny – Port Harcourt oil pipelines, which were fundamentally damaged by oil thieves and militants and left moribund and abandoned for over five years before OMS stepped in to prove that these valuable pieces of infrastructure were viable when in the hands of the right people.

OMS has pioneered a lasting solution in the quest for a cost effective and operationally efficient method of supplying Nigeria’s refineries with crude oil feedstock for local refining and consumption. We have shown that Nigeria does not have to accept failure.

In contrast, under Eraskorp’s watch the TFP has suffered huge crude oil losses of over 11 million barrels on the line and 60 days downtime (a value of $ 800 million) due to the TFP’s vulnerability and several illegal valve insertions from which oil thieves and vandals conduct their nefarious activities. Shoreline has done nothing to improve things.

The contractor responsible for security and supervision, Eraskorp, has clearly failed catastrophically in its duties and responsibilities. The entities that selected, promoted and tolerated Eraskorp for such an important mandate must share responsibility and face questions about why they put up with, and continued to support, such a hapless overseer.

Indeed, the Management of NNPC, have explained the rationale for the decision to cease their relationship with Eraskorp, saying:

“the decision to assign the TFP surveillance package to Ocean Marine Solutions was reached after consideration of huge losses on TFP and rigorous appraisal of the company’s impressive record of performance on the Bonny – Port Harcourt and Warri – Escravos Crude Oil evacuation lines.”

Therefore, the suggestions put about in the press that OMS’ involvement in the TFP is untoward is outrageous. Plainly, OMS has been selected on merit to replace a failed operator which should have been dispatched long ago.

5. The Smear Campaign

OMS has been outraged by the recent, futile, attempts by vested interests to misinform Nigerians and disparage and defame OMS.

It is clear that if OMS accepts responsibility for maintaining the security of the TFP, this will not only bring an end to much illegal profiteering but shine a light on the scale of the previous mismanagement.

Unsurprisingly, there is a small minority of rotten apples who would prefer this not to happen and will take any steps to prevent it. Foremost among those standing to lose out and find themselves acutely embarrassed if OMS delivers where they have failed is Eraskorp and its promoters.

Accordingly, OMS was not surprised to learn that it has been Eraskorp and its backers at Shoreline which are behind the various sponsored demonstrations and malicious media onslaughts on OMS’ hard-earned reputation.

The shoddiness of Eraskorp and their allies was aptly reflected through the disjointed publication of ham-fisted attacks on OMS during December 2018. Even our company name was muddled as “Ocean Marine Services” and the allegations that followed were equally confused.

In their unbridled quest to malign OMS and create public disaffection against our company, Eraskorp has alleged that NNPC awarded and re-awarded several surveillance and security contracts to OMS for a total sum of $9.9 million per month. This assertion is not only a fallacy but also a deliberate misrepresentation of fact as OMS currently manages and is in contract only on the Escravos – Warri and Bonny – Port Harcourt pipelines.

However, as a responsible corporate outfit, operating in an industry that demands integrity, we owe our customers and industry watchers explanations to debunk the misleading information that is circulating in the media that impugns our hard-won reputation.

The conspirators allied against OMS, principally Shoreline’s Tunde and Kola Karim, Maxwell Okoh, and Morris Idiovwa claim that the security contract for TFP was awarded to OMS against the wise counsel of all stakeholders in OML 30, the JV Partners, Operators and 111 communities in the oil field. This is untrue.

The claim that the TFP contract offered to OMS is three times that of the Eraskorp contract is false, baseless and unfounded. In any event, you cannot compare apples and oranges. The deployment structure, scope, terms and conditions of the proposed contract to OMS differs in all ramifications to that of the Eraskorp agreement.

Contrary to the false assertion put about by Eraskorp and others that pipeline security and surveillance contracts awarded to OMS by NNPC did not follow due process, it is pertinent to state that, the contract awarded to OMS by NNPC followed due process and complied with the relevant provisions of the Public Procurement Act.

NNPC has publicly stated, unequivocally, that there is nothing illegal in respect of the security contracts awarded to OMS for Provision of Security and Maintenance services for the Escravos – Warri and Bonny – Port Harcourt pipelines.

NNPC stated that:

“it is pertinent to note that the TFP contract is not subject to the provisions of the Public Procurement Act (PPA) 2017 by virtue of Section 15 (1) (b) of the PPA. The section provides as follows:

-(1) the provisions of this act shall apply to all procurements of goods, works, and services carried out by:
(a) The Federal Government of Nigeria and all procurement entities;
(b) All entities outside the foregoing description which derive at least 35% of the funds appropriated or proposed to be appropriated for any type of procurement described in this Act from the Federation share of Consolidated Revenue Fund.”

Assuming and not conceding that the provisions of the PPA applies to the TFP contract, OMS submits that the TFP contract is exempted from application of the PPA by virtue of the provisions of section 42 (1) (b) in view of the criticality of the asset and the overall national security.

Section 42(1) (b) of the Public Procurement Act (PPA) 2007, which in its pertinent parts provides as follows:

“42. -(1) A procuring entity may carry out any emergency procurement where:
(b) there is an urgent need for the goods, works or services and engaging in tender proceedings or any other method of procurement is impractical due to unforeseeable circumstances giving rise to the urgency which is not the result of dilatory conduct on the part of the procuring team”

Based on the provisions of Section 42(1) (b), it is clear that NPDC’s appointment of OMS which was done on emergency grounds and demonstrated performance to forestall further crude oil losses/production deferment which in essence is in the interest of national security.

It must also be stated that all our contracts from the IOCs and NPDC (NNPC) have fully followed the due process in line with international competitive bidding; the “Proof of Concept” or “The Cure and Pay” model which has been our modus operandi and hardly found in the oil and gas industry, creating uncommon values for clients

While attempting to ridicule the achievements of OMS, Eraskorp questioned why NNPC glorified OMS’ “impressive performance” on the Escravos – Warri and Bonny – Port Harcourt lines. Apart from the enviable scorecard by our employer, there are verifiable records for public scrutiny that points to the facts that since the engagement of OMS for the security and maintenance of these pipelines, a total of 60,177,843 barrels of oil (as at Nov 2018) have been delivered to the refineries, with an overall maximum percentage variance of -0.53% and refined for local consumption by the respective refineries, despite their current operational state. These pipelines remain readily available for the delivery of crude oil stock to the refineries and OMS has maintained a steady improvement in ensuring the pipeline achieves zero loses.

It has remained the duty of OMS to effectively protect and maintain these pipelines whether the refineries are working or not as abandoning them will make them revert to their once deplorable state. OMS contract is on a fixed cost element so long as the line is protected

It must also be stated that the Executive Chairman and vision bearer of OMS – Capt (Dr) Idahosa Okunbo – is a man of great integrity, who has served the oil industry for about 30 years without any blemish. Never been called for questioning, interrogated or indicted by any government security agent over the conduct of his businesses in the oil and gas industry.

In contrast, we also have on record several requests from Kola Karim to meet with Capt (Dr) Idahosa Okunbo which were declined as well as unethical offers made to OMS by Kola Karim on behalf of Eraskorp’s Maxwell Okoh and Morris Idiovwa.

No doubt, the intention behind the recent vexatious attacks, is to malign the impeccable reputation and the good names of OMS, its management, and Chairman, an act tantamount to financial strangulation of our business – a process that has made OMS suffer from undue operational stress which is about destroying all our operational commitments and contracts executions with our numerous clients.

It is also clear from available information at our disposal that Eraskorp’s intention is to frustrate the Federal Government’s good intention of eliminating illegal activities and increasing the crude oil transfer and export delivery capacity of the TFP.

6. The Future for the Trans Forcados Pipeline

It is important to state that OMS has not signed the contract that was presented to us by NNPC due to the controversies that have been generated by disgruntled parties and our resolve is never to work in terrains where our intentions are misrepresented.

However, it is notable that the TFP Proof of Concept contract proposed to OMS is premised on a structured security plan and Key Performance Indicators (KPIs). Under the proposed contract, OMS is obligated to protect the lines and is accountable if there is any breach to the pipeline and losses of crude. This arrangement is completely different from the old order where the contractor (Eraskorp) is paid for surveillance duties and totally exempted from repair costs or any other form of responsibility in the event of any break or breach to the pipeline for which the company has been contracted to watch over. In this way the new contract will no longer reward failure.

We are obligated as responsible Nigerians, not thieves, to engage local youths in the TFP to enable us execute our mandate. This makes the irresponsible claims and reports by Eraskorp of imminent loss of jobs by host community youths, completely incorrect mischievous and irresponsible.

OMS’s Community Engagement Model for Asset Protection that is operational on the Escravos-Warri and Bonny-Port Harcourt lines is unparalleled in the industry and the host communities have absolutely no issues with us as the pipeline surveillance service provider. This is what we intend to replicate whenever we sign the contract for the TFP.

7. Questions for the Authorities

OMS has categorically responded to the allegations raised in recent press reports and shown these to be baseless, ill-informed and motivated by a desperate bid to cling on to the lucrative TFP security concession.

The spotlight must now fall upon the orchestrators of the failed attacks and in particular questions asked about who has the most to lose if OMS takes over security for the TFP?

Ordinary Nigerians know how viciously the corrupt will protect their interests and OMS calls on the different security agencies (the Nigerian Police, The DSS, Army and others) to be vigilant and to hold Eraskorp and their promoter, Shoreline Natural Resources Limited, accountable for the safety of OMS workers and that of our Chairman, Capt. (Dr.) Idahosa Okunbo.

Honest Nigerians will be wondering:

● Who has the most to lose from the award of the TFP security and surveillance contract to OMS?

● Why are Eraskorp and Shoreline Natural Resources Limited so determined to malign OMS?

● How can Eraskorp have failed so badly to protect the TFP and how was this allowed to happen?

● Why was such a poor performing contractor as Eraskorp tolerated by Shoreline?

● Why does Shoreline persist in supporting a proven failure in Eraskorp?

● What is the relationship between Eraskorp and Shoreline?

● As stated by NNPC, 11 million barrels have been lost on the TFP with 60 days’ downtime (a value of $ 800 million). Who was responsible for these massive losses and who were the beneficiaries?

● Should Eraskorp be held legally and financially accountable for the losses caused by its failure to secure the TFP?

● It is time to open an investigation into the TFP and expose the truth.

SIGNED:
MANAGEMENT
OCEAN MARINE SOLUTIONS (OMS)

CC:
1. The President and Commander in Chief of Nigerian Armed Forces
2. The National Security Adviser
3. The Director, Department of State Security
4. The Inspector General of Police
5. The Honourable Minister of Defense
6. The Chief of Naval Staff
7. The Acting Chairman, Economic and Financial Crimes Commission (EFCC)
8. The Governor, Central Bank of Nigeria (CBN)
9. The Director General, National Intelligence Agency.

11 thoughts on “Oil Thieves Fight Back: Report Indicts Kola Karim’s Shoreline Limited & Eraskorp Limited

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