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Senate Faults Cost Variations Of $16bn Egina Oil Project, Begins Probe



The Senate yesterday said the local content elements and cost variations of the $16 billion Egina offshore oil project is faulty, full of irregularities and ordered immediate probe to audit it.

The investigation has become crucial because the lawmakers noticed irregularities and want to ascertain the monetary value of the project.

Egina project is being undertaken by Total Upstream Nigeria Limited, which started in 2013 and is almost 90% completed.

The project is estimated to produce 200,000 barrels of oil per day but has not been audited since the commencement, several years after.

The Chief Operating Officer of NNPC (Upstream), Engineer Bello Rabiu had brief the lawmakers on the background and scope of the Egina project. He stated that the NNPC had not called for an audit because the project was going on satisfactorily and within the approved budget.

Rabiu revealed that so far, NNPC has only approved $10.3billion of the Total cost of the project put at$16.3billion in contrast to about $11.4billion contained in document of Total Upstream.

Also, Mr. Nicholas Terraz, the managing director of Total Upstream Nigeria Limited who appeared before the lawmakers insisted that the project is constructed at lowest cost and is going according to plan with the FPSO constructed in Goje, South Korea which were about to arrive Nigeria.

However, Senate yesterday gave the  directives to probe the project during an investigative hearing of the Ad-Hoc Committee on Investigation of the Local Content Elements and Cost Variations.

Chairman of the committee, Senator Solomon Adeola (APC, Lagos) explained that there is need for a value for money audit both for technical and financial audit and that the project cannot be approved by Senate unless satisfactory verification is done.

He further noted that the investigation will be greatly assisted to reveal adherence to local content law and other applicable laws in the industry.

According to Adeola, the audit and its outcomes will also serve as a guide for other similar projects that is already in the pipeline stressing that the audit should be done by an independent body outside Total Upstream Nigeria Limited.

Meanwhile, the Nigerian Content Monitoring and Development Board (NCMDB) has been ordered to provide all relevant Local Content approvals it has granted for the Egina project including expatriate quota, trainings and related local content matters.






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