Korean Job Discussion Forums

[wylies99]

http://www.koreatimes.co.kr/www/news/biz/2009/03/123_42016.html

03-26-2009 17:19

Korea Sues Nigeria on Soured Oil Deal
By Kim Hyun-cheol
Staff Reporter

The state-run Korea National Oil Corporation (KNOC) said Wednesday it has filed a lawsuit against the Nigerian government for its cancellation of oil exploration rights.

The lawsuit followed Nigeria's refusal of a request for corrective action and its first trial was held in a court in the capital city of Abuja, a KNOC spokesmen said.

In January, the Nigerian government cancelled oil prospecting licenses KNOC was given in March, 2006 for the number 321 and 323 blocks in the Gulf of Guinea. The deal was signed in March 2006 by then-presidents of both countries Roh Moo-hyun and Olusegun Obajanjo during Roh's visit to Nigeria.

Korea failed to pay $231 million out of the $323 million it promised to pay in return for signing the deal, the Nigerian side said.

The current Umaru Musa Yar'Adua government, which took office in 2007 after a controversial election win, has been reversing many of the energy contracts made during the Obasanjo tenure.

KNOC said that the outstanding remainder in the payment has been offset by the Obasanjo government in the form of infrastructure construction projects, as stipulated in the contract.

Those projects, however, have been put on hold after a feasibility study from July 2006 through May 2007 because of delay in their master plan and other related works of the Nigerian government, the Korean oil firm said.

``We are not allowed to mention anything about what we will do next regarding the project,'' a KNOC spokesman said.

Each of the fields is estimated to hold a potential one billion barrels of crude oil reserves. KNOC secured a 60-percent stake in them in a consortium with the Korea Electronic Power Corp. and Daewoo Shipbuilding & Marine Engineering,

The Korean firm suspects the revocation of its licenses ``is politically motivated,'' Robert Clarke, a lawyer for KNOC, was quoted as saying after a court hearing.

``We know those who are behind it. They are big shots in the People's Democratic Party, and that is why we are in court,'' Clarke said in an apparent reference to Nigeria's ruling party, adding the government has no right to revoke the license since the KNOC has been operating on it for 18 months.

The next court hearing is scheduled for April 6.

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[wylies99]

And Nigerians are known for honesty.

[Whistleblower]

[coralreefer_1]

According to the article and other related news, Korea financed a large portion of the deal with a letter of credit. According to the UCP 600 (International agreement concerning letters of credit) if Korea did not meet its promised actions by a certain time, or some tiny mistake with translation in the document, payment methods and dates, or a whole host of other possible complications... then indeed the letter of credit is null and void, thereby voiding the contract for oil rights.

According to the Nigerian side, Korea did not live up to the stipulations stated in the letter of credit, and has every right in the world and the law to scrap the deals.

It may be politically motivated by way that a minute detail in the letter of credit, or timing of certain actions were used as an excuse to void the deal where in other cases those things might be overlooked and not called out, however if that is the case and Korea violated the letter of credit, Nigeria has the right to cancel the contract for oil rights.

[Beej]

How do you say Lonestar in the Yoruba language? How about karma?

[bobbybigfoot]

How ironic seeing a Korean company trying to have a contract honoured! lol
The Nigerians are just doing exactly what Koreans have always done: change the details as need be. What's wrong with that Korea?

[Guri Guy]

I believe "a taste of their own medicine" likely applies here.

[Alyssa]

poor mr,kim, mr. lee, and mr. pak, and the others who were trying to make a bunch of easy money off of the 'foreigners' in nigera

I am sure they are all honest men with hearts of gold

[Synn057]

Dear Sir,

I am. Dr.Idrissa Diop,Project Director Senegal National Petroleum
Corporation (S.N.P.C) and a Member of Contract Tenders Board of the same
parastatals. Your contact was reliably introduced to me at the Foreign
chamber of commerce and industry in my search for a reliable and trusted
individual and/ or company who can handle a strictly confidential
transaction, which involves Transfer of reasonable sum of money to a
foreign account......

Turns out it was true!

__Synn

[Forward Observer]

[Guri Guy]

It is interesting to see the Transparency indices for Nigeria and South Korea. Both have improved significantly since 2007.

[Beej]

[wylies99]

[ryoga013]

We paid you some of the money, isn't that enough for you honor your side of the contract? We have a hundred year old man on our team that says you have to, so by god, you have to. Seriously, why won't you listen to this sound logic?

[Guri Guy]