The Senate, yesterday, set up an adhoc committee to investigate the local content elements and cost variations related to the Egina Oil Field Project and two related Bonga South-West and ZabZaba projects.

The decision of the Senate followed a motion by Senator Solomon Adeola, which was co-sponsored by 18 others. The resolution was unanimously adopted by lawmakers, after it was put to a voice vote by the President of the Senate, Bukola Saraki.

The Red Chamber also mandated the committee to include in the investigation, a public hearing on the project and ensure there are no future changes necessitating further variations of the project cost.

Adeola, who chairs the Committee on Local Content, said various contracts were awarded to the various components of the Egina project. He 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.

“At inception, the project was estimated to cost $6 billion 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 3,000 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,’’ he said.

The lawmaker further disclosed that the “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) and Sapetro (15 per cent).

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“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.

In his remarks, the President of the Senate, Bukola Saraki, 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.

“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.

“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,’’ he said.

The Chairman of the adhoc committee is Senator Solomon Adeola, while members include Senators Godswill Akpabio, Tayo Alasoadura, Gershom Bassey, Kabiru Marafa, Philip Aduda, Albert Akpan, Ahmadu Abubakar, David Umaru, Chukwuka Utazi and Stella Oduah.