Defamation/Falsified Commercial Evaluation: Still Earth Drags Palmeron, Demands Retraction, Monetary Compensation Within Seven Days

By Eric Elezuo

Foremost construction company, Still Earth Limited, and its sister company, Tirex Petroleum and Energy Limited, have written to Palmeron, accusing it of defamation of character, and what they called falsified commercial evaluation, demanding in return a retraction of the defamatory statement to be published in three national dailies, and monetary inducement to compensate for their loss.

The sister companies made the assertion and demand in a letter addressed to the Chief Executive Officer of Palmeron, dated October 5, 2022 and titled Re: Cease and Desist Letter by its lawyer, Kemi Pinheiro SAN.

The letter, which Palmeron was given a total of seven days to concede to its demand, threatened to commence without recourse a legal process against it as well as a slam a N5 billion libel suit against Palmeron.

According to the Pinheiro, Palmeron had “falsely and maliciously wrote and published defamatory words concerning our client – Tirex – in the way of its business…”

The letter in full:

5th October, 2022

The Chief Executive Officer,
Palmeron …………,
No. 5B Walter Corporation Road,
Victoria Island,
Lagos State.

Dear Sir,

RE: CEASE AND DESIST LETTER

INRE: DEFEMATORY WORDS CONTAINED IN:

YOUR LETTER OF 26/09/2022 (REF: TEUNL-0709-PAL-005) ADDRESSED TO THE GCEO OF NNPC LIMITED; AND
YOUR SPONSORED WIDELY CIRCULATED E-MAIL OF 14/08/2022 ADDRESSED TO NUMEROUS READERS UNDER THE HAND OF A FACELESS ASSOCIATION OF CONCERNED CITIZENS

We write upon the instructions of Tirex Petroleum and Energy Limited {“Tirex” or “the company” or “our client”} and her sister company Still Earth Limited {“Still Earth”} both of which shall where the context so permits, be referred to as “our clients”.

Our Clients’ Profile

Our clients, particularly Tirex is a wholly owned indigenous Nigeria company in the Nigeria Oil and Gas industry. Since its inception, Tirex has been backed by a strong investment and operating structure that incorporates exceptional ethical standards in line with global best practices. The company’s strong local knowledge, coupled with its exceptional and high ethical operating standards has provided the basis for multiple assets owners to partner with the company in the operation of these assets, worth billions of dollars, to drive the company’s strategic operations.

These values and capacity have allowed the company to challenge the status quo in the dividing sector and consequently deliver safe and efficient drilling and well intervention services at the best industry cost. The company over the last few years has remained focused on its objective to becoming one of the most law-compliant/abiding and preferred drilling contractors in the Nigerian Oil and Gas sector. Tirex has continued to demonstrate the highest level of professionalism and diligence for which it has become known as it carries out complex projects and deliver value to its teeming clients and partners.

It was as a result of the its afore-stated sterling and impeccable standing in the comity of indigenous operators in the Nigerian Oil and Gas sector that Tirex has continued to be the chosen bride of large number of clients and partners in the execution of several projects.

Your False and Malicious Defamatory Publications

Our client’s attention has been drawn to your letter dated 26/09/2022 with reference number: TEUNL-0709-PAL-005 addressed to the Group Chief Executive Officer of NNPC Limited with the caption – Updated Petition on the irregularity and abuse of procurement process in the award of contract for the provision of drillship for TOTAL E & P OML 130 Drilling Campaign Tender No: DW00001997 – which letter is also making the rounds on social media platforms under your direction and/or at your instigation.

By the contents of your letter under reference, you falsely and maliciously wrote and published defamatory words concerning our client – Tirex – in the way of its business, the following words:

At paragraph 6 of page 1:

In our understanding, any claim that TotalEnergies cannot continue with the tender is INVALID and deceitful. Just 3 weeks ago. TotalEnergies was willing to award the contract to a consortium of TIREX/PIDWAL/NOBLE following an irregular and falsified commercial re-evaluation which was withdrawn following PALMERON’s complaint on the irregularities.

At paragraph 1 of page 4:

To our greatest surprise, TotalEnergies and NAPIMS instead of awarding the contract to PALMERON after an intentional prolonged negotiation, decided to arrange an urgent top-level meeting to discuss awarding the contract to TIREX/PIDWAL/NOBLE consortium, a decision that resulted from an irregular and falsified commercial re-evaluation. We immediately sent a letter to you Sir (GMD) about the illegality of the process.

At paragraph 5 of page 4:

PALMERON a local contractor has been bullied, intimidated, and frustrated by NAPIMS & TotalEnergies. More shocking and depressing is the information on how the recent falsified commercial re-evaluation was planned and executed to fraudulently disqualify PALMERON and accommodate individual interest by making up documents and providing false information about our Drillship availability. This inappropriate and callous act we learnt was carried out as stated below:

On the 5th of August 2022, TotalEnergies held a meeting with NAPIMS to discuss TIREX/PIDWAL/ NOBLE Drilling rate, at this meeting, a benchmark of $450k daily rate was agreed and the $430k proposed by TIREX/PIDWAL/NOBLE was accepted immediately and push to award the contract to TIREX/PIDWAL/NOBLE consortium. One would wonder, why the discrepancies in their benchmark for using $250k for PALMERON and $450k for Noble Drilling and TIREX.

TotalEnergies ensured an intentional delay of 3 months from the 22nd of April when we updated our rate to $322,500 before agreeing to $430k with Tirex Consortium. If a conditional award was made to PALMERON in April, our proposed Drillship would have been in Nigeria by now drilling to support the Nigeria economy.

At paragraph 1 of page 5:

Analysis of the falsified commercial evaluation template generated for the sole purpose of ensuring the contract is not awarded to PALMERON are presented below:

Introduction of a line item to accommodate TIREX as a party to the consortium of Derotech and Noble

TIREX, a company that did not participate in the tender, formed a consortium with Noble Drilling that already have a local representative. There is no contractual, technical or local content need for PIDWAL/Noble to partner with TIREX. It is obvious that the sole purpose of this is to make TIREX a signatory to the contract to capture the interest of those pushing for TIREX.

Contract Duration

The approved contract strategy/duration is a single award for a contract duration of a 1year firm plus 1year optional extensions. We are aware that the approved NipeX commercial evaluation template was in line with the approved contract strategy as it was indicated in the commercial instructions to tenderers. Also, information shows that all already approved OML 130 drilling ancillary contract services that would be onboard the drillship were approved based on a rig contract duration of 1 year firm plus 1-year optional extensions.

The falsified evaluation template used to disadvantage PALMERON and accommodate TIREX’s sponsors interest is based on 290 days duration (a complete deviation from the approved evaluation template). With PALMERON’s rates already known, TotalEnergies/NAPIMS ensured their permutations does not go beyond 290days – 300days duration to ensure that the TIREX’s high rate of $430,000/day appears lower when other falsified accompany rates such as production deferment are added.

It is worthy of note to state that TotalEnergies/NAPIMS used a benchmark of $250k for PALMERON rig rate during our negotiations, but a TIREX/PIDWAL/Noble consortium, a benchmark rate of $450k/day was used by the PSC partners and a daily rate of $430k was instantly accepted.

If the approved commercial evaluation template is used, which has a duration of 730 days, PALMERON’s rate including reactivation fees amounts to $265,425,000 while TIREX consortium rate amounts to $313,900,000. It is obvious that PALMERON’s is far lower with a difference of over $48m.

It is our understanding that all organizations encourage cost saving but the rule was changed at the end of the game to accommodate TIREX consortium by reducing the days to 290 which is unlawful.

At paragraph 1 of page 6:

TotalEnergies requested for bidders to update their rig availability in August and December 2021, only PALMERON’s rig was possibly available to meet the initially planned drilling campaign for April 2022 but the rigs that were not going to be available were systematically kept in the tender so they can be used to frustrate the award to PALMERON even though the drilling contractors provided availability date beyond April 2022.

At paragraph 2 of page 6:

It is a common procurement practice that all equipment not available to meet the client commencement window will automatically be disqualified. As of December 2021, Noble Drilling (Pacific Santa Ann now Noble Gerry De Souza) provided availability date of December 2022 at the time the rig was in contract with various options to extend to December 2022. It is obvious that the drilling campaign was intentionally delayed to December 2022 to accommodate TIREX consortium with PIDWAL and Noble Drilling.

At paragraph 4 of page 6:

For TIREX/Noble, a recommendation to Award was already sent to NAPIMS. What a fast track. This achievement was made barely a week after the falsified evaluation was carried out, with no rig inspection conducted on the rig (a prerequisite to making any commitment).

At paragraph 2 of page 7:

It is now obvious that the award of the contract to PALMERON has been intentionally delayed until such a time that TotalEnergies/NAPIMS are able to accommodate the interest of some individuals by finding a means be it illegal or otherwise to award the contract to TIREX consortium. If the award was given to PALMERON in April 2022 as promised, drilling activities would have commenced with the first Nigeria Drillship.

At paragraph 3 of page 7:

Following a formal petition from PALMERON on the illegality of awarding the contract to TIREX consortium, it is understood that TotalEnergies knowing the implications, immediately sent another letter to NAPIMS to withdraw their attention to award to the consortium with TIREX involvement. This did not go well with NAPIMS management who consequently directed for the cancellation of the tender and relaunch a new process.

At paragraph 6 of page 7:

Any attempt not to award the contract to PALMERON shall be an obvious case of discrimination and clearly unlawful. The action of the individuals involved in this abuse of tender process can be seen in different perception, their behaviour may appear justified by their personal interest against national interest, but we posit that from all indications, their intention remains a malicious and unauthorized action carried out for the selfish benefit of one person or company to the detriment of PALMERON.

At paragraph 2 of page 8:

NAPIMS management request for the tender to be cancelled and commenced another tender is vindictive and abuse of power and process, all because the plan to illegality award the contract to TIREX consortium or another contract or interest was faulted.

Our client is also not unaware of your sponsored and clandestinely coordinated e-mail of 14/08/2022 purported to have authorized by a faceless Association of Concerned Citizens, which e-mail was as well widely circulated and in which e-mial you, acting under the pseudonym of Association of Concerned Citizens had earlier falsely, recklessly and maliciously written and published of our clients defamatory words in the way of their business similar or substantially similar to the terms as adopted in your aforesaid letter under reference.

The afore se-out words, in their national and ordinary measuring and/or by way of innuendo, whether read conjunctively with the other contents of the letter and the email or disjunctively, are, no doubt, meant to mean that our clients are:

entrenched in corruption-related malpractices in almost if not all of their business undertakings;

involved in criminal and fraudulent manipulation and falsification of commercial documents aimed at gaining business/financial advantage;

engaged in monumental fraud aimed at sabotaging the economy of the Federation of Nigeria;

in breach of laid down rules and procedures and laws of Nigeria in securing contracts; and

involved in contract scams and other fraudulent activities.

The Consequent Damage to our clients Reputation

There is no gainsaying the fact that these charges amount to a very serious libel on our clients that touches directly, and adversely too, on our clients’ business and goodwill.

The concerned members of the public, including our clients’ present and potential clients and partners, who have since the aforesaid publication been inundating our clients’ officers with telephone calls, have, by reason of your false and defamatory publication formed the opinion that our clients conduct their businesses in a dishonest, illegal, fraudulent and unethical manner. Your defamatory publication, which has enjoyed wide readership, no doubt carries with it the imputation of extreme corruption which has seriously dented our clients’ hard-earned reputation and goodwill. Clearly, in the way you have proceeded in your reckless defamatory publication, you have left no one in doubt that your mission was calculated to injure our clients in the way of their business which have made the members of the business public reluctant to deal with our clients henceforth.

Demand and Option for Settlement

We have been instructed by our clients to make a demand and we hereby formally demand that you, within 7 days of receipt of this letter, cause to be published to the same recipients of your letter and email under reference and using the same social media platforms a full and unequivocal public retraction and apology in terms to be approved by our firm; and in this regard we expect you to revert to us within 3 days of receipt of this letter.

We have also advised our clients that they are entitled to substantial monetary compensation including legal costs for the injury occasioned to their reputation and business goodwill, in respect of which we expect proposals from you within 7 days of receipt of this letter.

SAVE and EXCEPT we receive a satisfactory reply from you within the timelines as stipulated above, our instructions are to commence legal proceedings against your company, without further recourse to you, for the following claims:

DAMAGES, including exemplary damages, in the sum of N5billion for libel contained in your defamatory publication.

INJUNCTION against you restraining further or similar publications.

AN ORDER for retraction of the defamatory words and a public apology in the terms and manners to be stipulated by us and published in at least 3 National Dailies.

Yours faithfully,
For: PINHEIRO LP

Dr. ‘KEMI PINHEIRO, SAN, FCIArb.