Why Nigeria may not benefit from the $16 billion Total Egina Project-Solomon Olamilekan
Adetokunbo Fakeye
Abuja, Nigeria. Dec. 5, 2017 (AltAfrika)-Nigeria Senate Committee on Local Content has expressed serious doubt over the likelihood of Nigeria reaping any benefit from its $16Billion investment in deep sea offshore Egina oil Project being majorly undertaken by Total Upstream Nigeria Limited, TUNL.
This worry was expressed by the Chairman, Senate Committee on Local Content, Senator Solomon Olamilekan Adeola, during the Committee’s interactive session with the Managing Director of TUNL, Mr. Nicolas Terraz.
According to Senator Adeola, in a statement issued by his Media Assistant, Chief Kayode Odunaro, Nigeria may not derive any benefits from the project because so far the huge sum that had so far been expended has not impacted on the local economy in contravention of the Nigeria Oil and Gas Industry Development Act, 2010.
The project is expected to produce 200,000 barrels per day for the next 25 years i
“From information at the Committee disposal about $11 billion has been expended on the Egina project after some variation in the original cost of $6billion leaving a balance of about $4billion for the project expected to come on stream next year.
“For the next 25 years, Nigeria may not get any benefit from this huge project at all as by law relating to the depth of the offshore Floating Production Storage and Offloading ( FPSO) even royalty will not be paid to Nigeria within the period”, he stated.
While requesting TUNL to supply more information on the project particularly in relation to the implementation of Nigerian Local Content Act as well as evidence of over $1billion taxes allegedly paid as part of an omnibus $4billion “other expenses” by TUNL Senator Adeola pointed out that most of the reportage of local content in the projects so far may just amount Local Commissioned Agents for foreigners at the expense of Nigerian people adding that there is need for the TUNL to supply the Committee the Local Content Plan of the balance of about $4billion yet to be expended on the project.
Senator Adeola said that with the project being the first of its kind in Nigerian oil industry and with two others in the process of coming on stream there is need to ensure that Nigeria derive the maximum benefits from the project by correcting any observed anomalies in the projects and those coming on stream.
In his presentation, Mr. Terraz stated that while he will not claim that the Egina Project is perfect it has so far been executed as a pioneer project that will serve as a bench mark in the industry for others coming on stream adding that it is a huge engineering project subject to many changes in the course of its successful execution.
TUNL was given one week to supply more detailed information with reference to Nigerian Content of the project, evidences of taxes paid, personnel employed and expatriate quota, qualifications and salaries of local and foreign staff and records of usage of locally fabricated items as pipes, plastics etc on the project.
Senators present at the sitting include Senator Abdullahi Gumel(Jigawa North west), Senator Sabi Abdulahi (Niger North), Senator Gershon Bassey(Cross River South), Senator Binta Masi Garba (Adamawa North) Senator Biodun Olujimi (Ekiti South), Senator Mallam Wakili (Bauchi State) and Senator Kabir Marafa(Zamfara Central).
