SENATE ORDERS VALUE FOR MONEY AUDIT ON $16 BILLION EGINA DEEP-SEA OIL PROJECT

The Senate Ad-Hoc Committee on Investigation of the Local Content Elements and Cost Variations of the $16 billion Egina offshore oil project has ordered that the account of the project be audited in terms of value for money to ensure that Nigeria is not trapped in perpetual debt without any benefits from the project.

The project being undertaken by Total Upstream Nigeria Limited, which started in 2013 and is almost 90% completed has not been audited in any form since the commencement of the project estimated to produce 200,000 barrels of oil per day.

Giving the directives at the investigative hearing of the committee, Senator Solomon Adeola (APC, Lagos) the chairman of the committee stated there is need for a value for money audit both for technical and financial audit adding that the investigation will be greatly assisted by the values for money audit of the project as well as reveal adherence to local content law and other applicable laws in the industry.

The chairman of the committee further stated that 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.

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

Senator Adeola said by the regulatory bodies like NNPC ought to have called for audit in the past based on what is contained in the agreement for the Egina project stressing that until the audit is done no similar projects would be approved by the Senate.

Earlier on the Chief Operating Officer of NNPC (Upstream) Engineer Bello Rabiu had brief the committee on the background and scope of the Egina project stressing however that the NNPC had not called for an audit as the project was going on satisfactorily and within the approved budget.

He stated 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.

Mr. Nicholas Terraz, the managing director of Total Upstream Nigeria Limited also briefed the committee on the project that he said is going according to plan with the FPSO constructed in Goje, South Korea arriving Nigeria tomorrow.

He stated that the project is assured to be beneficial to Nigeria and Total in the long run as it is being constructed at the lowest cost and best practices.