$16 BILLION EGINA PROJECT INCURRED $2BILLION VARIATION

-Senate Approve Forensic Value for Money Audit

The ongoing Total Upstream Nigeria Limited Egina Deep Sea oil project has so far incurred a cost variation of over $2 billion according to the Interim Report presented to the Senate by its Ad Hoc Committee on Investigation of Local Content elements and Cost Variation Relating to Egina Oil Field and Other Related Projects.

The report, which was presented by the Chairman of Senate Committee on Local Content, Senator Solomon Adeola(APC, Lagos West) cumulated variations from original contract sum for six companies involved in the project to the tune of $1,235.67billion when the report was written but has ballooned further to $2billion as at the time of presentation of the report.

Senator Adeola who listed various infractions on the Nigeria Oil and Gas Industry Content Development (NOGICD) Act, 2010 in the execution of the Egina project stated that most of the variations occurred prior to commencement of the project adding that most local companies that participated in the project were fronting for foreign companies as conduit pipes at the expense of Nigerians.

“For example , Bell Oil and Gas Nigeria Limited bided for and got a pipeline contract of over $42 million but all the pipes were imported directly by TOTAL itself and about N20 million was paid to BELL as training fees” Senator Adeola stated.

The report stated that despite the fact that the project was estimated to cost $6billion, it was reviewed twice to $13billion and again to $16.3billion while the award to major aspect of the project to Samsung Heavy Industry (SHI) was at the expense of Hyundai Heavy Industry (HHI) which bided a lower cost.

Senator Adeola stated that based on the technicalities of execution of the offshore project and the preliminary findings of the committee, there is need for the Senate engage professionals in the field to conduct a Value for Money Audit of the project in the areas of technical, financial and project manangement as the project has not been audited at all in its 5 years span. The Value for Money Audit will be part of a comprehensive final report to guide the Senate and serve as guide for similar projects that are already on the table.

“We must make efforts to stop the filtering away of our resources overseas through this kind of projects that are to be paid for with our resources for 25 years and beyond. While we seek foreign investments in Nigeria,we cannot mortgage the future of our unborn generations to practices that shortchange the nation” Senator Adeola stated..

The Senate in a resolution approved the single recommendation of the report for a thorough forensic audit of the Egina project by professionals to be paid for by the Senate to avoid conflict of interest.