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Senate loses confidence in agencies, orders ‘Value for Money Audit’ on Egina FPSO

After the settling down of festivities heralding the arrival of Egina Floating Production Storage Offloading (FPSO) platform from South Korea several weeks ago, the Senate Ad hoc Committee on Investigation of Local Content Element on Egina Oil Field and other related Projects, has expressed anger over another cost variation, conservatively put at $1billion.

But rather than allowing NNPC/NAPIMS as required by the contractual agreement to carry out another variation, the Committee resolved to seek other independent consultants to do a 16-week “Value for Money Audit” of the Egina project.

Accordingly, Senate has halted further variations on the Total Upstream Nigeria Limited 16.3 billion dollar Egina Deep Sea Oil Project.

In a statement sent to Business Hilights by Mr. Kayode Odunaro, Media Adviser to Senator Solomon Adeola, he said after a two billion dollar variation on the project, there was proposal for another one billion dollar variation which is worrisome and tends to suggest an avoidable gang up within.

While arguing that there was need to get detailed explanation of the variations by various sub-contractors to Total Upstream Nigeria Limited, the major operator of the project, Senator Adeola, representing Lagos West averred that “The audit would last for 16 weeks by consultants paid by the Senate to ensure independent account instead of being carried out by NNPC/NAPIMS as required by the contractual agreement”.

He decried that “Over the five year period of the project no audit of any kind has been carried out”.

However, the Managing Director of Total Upstream Nigeria Limited, Mr. Nicolas Terraz, has assured that Total would continue to assist the committee in its investigations.

Industry players are upbeat that the FPSO, whose arrival was seem as a great boost to offshore exploration will increase Nigeria’s crude output and foreign exchange when it begins operations very soon.

However, observers say Senate fears are found on the incessant jerk up of its real value, which is seen as a ploy to rip off the country via deductions when Egina begins to make returns in the prevailing Joint Venture with NNPC after all.