The Senate, yesterday, constituted an adhoc committee to investigate the local content elements and cost variations of the Egina Oil Field Project.
Two other related Bonga Southwest and ZabZaba projects are
also to be investigated for the same purpose.
The resolution followed a motion by Chairman, Senate
Committee on Local Content, Senator Solomon Adeola and 18 others.
The upper chamber asked the committee to include in the
probe, a public hearing on the project and ensure there are no future changes
to necessitate further variations of the project cost.
Adeola told the Senate that contracts were awarded to the
various components of the Egina project.
The Lagos senator
expressed concerns that many of the contractors handling the project were found
to have engaged sub-contractors to provide various aspects of the project
components.
He said the Egina project was expected to comply with the
provisions of the Nigerian Oil and Gas Industry Content Development Act of
2010.
He said: “At inception, the project was estimated to cost 6
billion dollars but has undergone various cost variations that currently put
its cost at over $16. 352 billion.
“At inception, the project boasted of 24 million man-hours
of work done representing 77 per cent of the work load for the project and
equivalent to a workforce of 3000 persons
on average over a period of five years. It is worrisome that over the
life of the project, its cost components have been reviewed twice from the
initial $6 billion to $13 billion and more recently $16.352 billion.
“Meanwhile, petitions have been submitted to the effect that
monumental fraud and acts of disregard for the Nigerian Oil and Gas Industry
Content Development Act of 2010 abound on the procurement and contractual
arrangements.
“Egina project is located within the Oil Mining Lease(OML)
block 130 and covers an area of about
500 square miles. It is developed by Total Exploration and Production
Nigeria Limited(24 per cent) in partnership with CNOOC Energy Nigeria
Limited(45 per cent), Petrobas(16 per cent), Sapetro(15 per cent).
“The essence is to contribute an estimated 20,000 barrels of
oil per day to the Nigerian daily oil production from the planned 2018
commencement date and the oil field is situated at water depth of up to 1,750m.
Meanwhile, engineering studies for the Egina Oil-Field Project began in 2008,
with an approval of the National Petroleum Investment Services (NAPIMS)and the
Department of Petroleum Resources (DPR) in 2008 and 2009 respectively.
“The Egina project was conceived as a deep offshore field
comprising of a Floating Production and “Offloading Vessels(EPSO). It was also
conceived as an Oil Offloading Terminal and Subsea Production Systems.’’
Senate President
Bukola Saraki, in his remarks, said the issue of cost variations and
lack of adherence to the local content law were paramount.
Saraki charged the committee to take the investigation
seriously, adding that the allegations were enormous and should not be treated
with levity.
He said: “I find it
difficult to understand why cost variation will move from $6 billion to $16
billion in 10 years. Why such variations and when will the Federal Government
ever get revenue on these fields.
“If we allow this to go with the Egina project, other deep
offshore will follow the same model and government will never get the revenue.
The second issue is to ensure compliance with the local content law. The
committee has the responsibility to turn in the report as soon as possible. We do not want the
report to linger on.
“Please ensure you are done in three weeks so that by the
time we resume we will consider the report and be able to address other
projects that are going on.’’
Chairman of the ad-hoc committee is Senator Solomon Adeola,
while other members include Senators Godswill Akpabio, Tayo Alasoadura, Gershom
Bassey, Kabiru Marafa, Philip Aduda, Albert Akpan, Ahmadu Abubakar, David
Umaru, Chukwuka Utazi and Stella Oduah.
The Nation
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