Senate probes Egina Oil Field over local content fraud

The Senate on Tuesday  constituted an ad hoc Committee to investigate local content elements and cost variations relating to Egina Oil Field and Bonga South-West and ZabZaba projects.
This followed a resolution by the lawmakers, sequel to a motion by  Solomon Adeola (APC-Lagos) and co-sponsored by 18 others.
In the motion, Adeola, who is Chairman of Committee on Local Content, said that various contracts were awarded for various components of the Egina project.
He said that the Egina project was expected to comply with the provisions of the Nigerian Oil and Gas Industry Content Development Act of 2010.
Adeola stated that the project managers were expected to award required contracts to Nigerian companies, engage local power and provide adequate manpower training and development programmes for Nigerian workforce.
He told his colleagues the oil field was expected to provide needed technology and knowledge transfers, proportionate to the overall project value and scope.
“At inception, the project boasted of 24 million man-hour of work, representing 77 per cent of the workload 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 six billion dollars to 13 billion dollars and more recently, 16.35 billion dollars.
“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 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%) in partnership with CNOOC Energy Nigeria Limited (45%), Petrobas (16%) and Sapetro (15%).
“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.
“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.
Contributing, lawmakers expressed concern about infractions in contracts entered into by the Federal Government and International Oil Companies (IOC).
They decried the situation in the projects execution which had seen several billions of dollars lost to the contracts, impoverishing Nigerians and enriching the IOCs in the process.
Consequently, the Upper Chamber mandated the committee to carry out a public hearing on the project and ensure that there were no other changes necessitating further variations of the project cost.
In his remarks, the President of the Senate, Bukola Saraki, commended Adeola for the motion.
He said that 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.

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