Nigeria Senate Inaugurates special committee to Investigate local content of Egina oil field
Abuja, Dec. 2017 (AltAfrika)-Nigeria Senate has made good its promise to investigate local content elements and cost variations relating to Egina Oil Field and Bonga South-West and ZabZaba projects . President, Dr. Abubakar Bukola Saraki on Wednesday inaugurated the Senate Special Ad-Hoc Committee to do the job.
While commending Senator Solomon Adeola Olamilekan, Senate Committee on Local Content for co-sponsoring the Motion alongside 18 other Senators stated that sponsor of the Motion acted as ”a true servant” of the people, in helping to channel the concerns of Nigerians about this project, particularly with its compliance to the Nigerian Oil and Gas Industry Content Development Act of 2010.
‘”As we all Know, the Egina Project was conceived to contribute an additional 200,000 barrels per day to Nigeria’s oil production. Enigma is a big deal, indeed, and is rightly celebrated as the largest oil and gas development project currently underway in Nigeria” Saraki said. ”Ordinarily, it should be good news that Egina also boasts the largest local content of any project of its kind in this country-comprising employment, fabrication, training and infrastructural elements.
“It is also a matter of serious concern to note that the project has been subject to several cost variations, resulting in a hike in estimate from 6 billion to 16 billion dollars over a period of ten years
”As you know, part of our focus in the Budget process is that we must insist on Value-for-Money on all contracts – and Egina is no exception’
”There must be transparency and accountability, because the money expended on projects is the common patrimony of our people. So, we really must find out what is going on with Egina Oil Field development; we must diagnose its true health’
”Nigeria’s multi-billion-dollar investment in this project is just too staggering for us to tarry in this investigation. We have not, as a country, made a kobo from this project. We want to ensure that we can start to do so before too long’
”And that all the advantages filter down to our people. Our level of toleration for the current state of affairs with regard to Egina, will have implications for other deep offshore projects, going forward”, he said.
The Chairman of the Ad-Hoc committee, Senator Solomon Adeola Olamilekan in his opening remarks disclosed that on Tuesday 5th December 2017 a motion he raised titled ‘”The Legislative Investigation on Local Contents Elements and Cost Variation relating to the Egina Oil Field and other related projects” has necessitated the formation and inauguration of this special Ad-Hoc committee.
He said: ”Considering that we have invited all stakeholders involved for this inauguration, in order to clarify some of these issues and suggest possible ways forward, permit me to provide a brief background to the issues warranting this investigation”, Senator Adeola said.
”Section 3 (I) of the Nigerian Oil and Gas Industry Content Development Act, 2010A provides that Nigerian Independent operators shall be given first consideration in all projects in the Nigerian oil and gas industry”
”Engineering studies for the Egina-field began in 2008 with an approval of the National Petroleum Investment Management Services (NAPIMS) and the Department of Petroleum Resources (DPR) in 2008 and 2009 respectively”
Speaking further, Senator Adeola in his conclusion stated that the Ad-Hoc committee is concerned but not restricted to the following issues; The basis of the two or more variations in the cost of the project; The general compliance of individual aspects of the Egina Project to the provisions of the Nigerian Oil and Gas Industry Content Development Act of 2010; The aspects/components of the Egina project that have had cost variations since project commencement; The impact of the over 167% variation in the initial project capital expenditure on the overall project and Viability to the Nigerian government, as this variation is expected to drastically change the project payback period.
Senator Adeola at the end of the inauguration expressed optimism as the Chairman of the committee that a thorough job will be done to ensure that Nigeria’s interest is protected as contained in the Nigerian Oil and Gas Industry Content Development Act 2010.