A member of the Federal House of Representatives, representing Egor/Ikpoba-Okha constituency of Edo state, Mr Ehiozuwa Johnson Agbonayinma, has called on the federal government to be cautious of the plan by a US-based multinational company, General Electric (GE) Oil and Gas Incorporated, to invest in Nigeria.
The advice came against the backdrop of media reports that indicated the company would invest $150 million this year to rehabilitate the nation’s three refineries in Kaduna, Port Harcourt and Warri as well as intervene in some of the country’s major national power projects which have a combined capacity of about 4.4 gigawatts.
GE Global chairman and chief executive officer, Jeff Immelt, on January 25, this year, led a delegation to the Nigerian National Petroleum Corporation (NNPC) headquarters in Abuja where it (delegation) made a presentation to the NNPC team headed by the Group Managing Director, Dr Makanti Baru.
Immelt had said, as part of the offering, “GE and NNPC have identified some major national power projects in the country and are currently developing the scope of intervention in the projects,” adding that GE was ready to work with the NNPC to make production in the off-shore fields profitable for the benefit of both companies and other stakeholders.
But Agbonayinma said that the US-based company “cannot be trusted to keep to its terms of contract and, therefore, incapable of sustaining trust, which is the most important element in business relationships. The federal government should be careful not to be shortchanged by GE.
“Besides, GE is taking advantage of its planned investments in Nigeria to shore up its shares in the US stock market. Even, if it changes its mind today, the value of the shares had already gone up. This is one of the business sharp practices that are perpetrated by some of these multinational companies.”
He said that SALOF Industries Nigeria Limited, a company in which he had interest before his election into the House of Representatives had, since 2013, sued GE in a Lagos High Court for contract breach in the acquisition of SALOF Refrigeration Companies, USA (a designer and manufacturer of small-scale liquefied natural gas technologies).
Agbonayinma stated that the suit was consequent upon the lapse of a 14-day ultimatum given to GE in a letter dated July 3, 2013 by counsel to SALOF Industries Nigeria Limited, Chief Mike Ozekhome (SAN), for GE to initiate processes of mitigating the loss that SALOF Industries Nigeria Limited suffered due to the acquisition.
He said that SALOF Refrigeration Companies USA had on May 15, 2008 entered into an agreement of commission payment of 20 percent to SALOF Industries Nigeria Limited on all orders originating from Nigeria, Ghana and Uganda.
According to him, “On October 5, 2010, the USA-based companies had sent an addendum to the signed commission agreement, stating that it would pay 5 percent to the Nigerian company on orders originating from other companies while the 20 percent commission payment would apply on orders originating from SALOF Nigeria.”
He stated that the notice to explore legal options was sequel to the Managing Director of SALOF Refrigeration Companies USA, Mr George Salof’s May 6, 2013 communication to the Managing Director of SALOF Industries Nigeria Limited, Mr Oghenekaro Jockey, that GE Oil and Gas had entered into an agreement to acquire SALOF Refrigeration Company Incorporated.
Agbonayinma explained that Mr Salof was quoted to have said the acquisition would give GE Oil and Gas access to SALOF small scale LNG and Co2 Processing technologies and fabrication expertise, and maintained that SALOF would continue to operate as a separate business.
But the management of SALOF Industries Nigeria Limited, which signed an agreement as a sole agent of the Schertz, Texas based companies on July 29, 2007, kicked when it received a letter dated June 11, 2013 from GE Oil and Gas informing it of the termination of its commission agreement and affiliation with SALOF Refrigeration Companies USA.
The letter, which was addressed to Mr Oghenekaro Jockey, Mr EJ Agbonayinma and others (all directors of SALOF Industries Nigeria Limited) was signed by Global Sales and Commercial Leader/SALOF Integration, Erik Barton.
In the notice of intention to proceed against GE Oil and Gas in court, SALOF Industries Nigeria Limited, a subsidiary of SALOF Companies USA, said that “prior to the acquisition of SALOF by GE Oil and Gas, SALOF Nigeria had embarked on the design of a turnkey project with the support of SALOF USA in partnership with UDDIPCO for Chevron Nigeria. SALOF Nigeria and SALOF USA had invested remarkable efforts to ensure the success of this project.
“It was to our dismay to realise that SALOF USA disengaged from further participation in the said project without prior notice to SALOF Nigeria for proper communication to Chevron Nigeria. We went on to express this disappointment in a mail to Mr George Salof on the 12th of June 2013.
“It is worthy of note that tremendous resources, including but not limited to financial and human resources have been invested into marketing the SALOF identity in the Nigeria market by SALOF Nigeria.
“Such efforts resulted in the authorization by the then Minister of State for Energy (Gas), Mr Olatunde Odusina, to the NNPC for the introduction of SALOF Nigeria to Addax Petroleum Nigeria limited, Shell Petroleum Development Company Limited, Nigerian Agip Oil Company Limited, Mobil Producing Nigeria Limited, Chevron Nigeria Limited and Pan Ocean Oil Corporation.”
Agbonayinma disclosed that, even though the court case in Lagos has suffered a series of adjournments, the Board of Directors of SALOF Nigeria still has faith in the judiciary.
He expressed the company’s confidence in the course of justice, pointing out that “justice will prevail if not in Nigeria, certainly in the US.”
