The Senate on Wednesday resolved to demand for full audit of the 16 billion Egina oil field contract.

The upper chamber said that value for money audit be approved for proper examination by reputable firms in the areas of technical, financial and project management aspects of the contract.

This is contained in the interim report of the senate ad-hoc committee that investigated the local content elements and cost variation of the Egina oil field contract.

Chairman, Senate Committee on Local Content, Senator Solomon Adeola, presented the interim report of the ad-hoc committee for consideration of the Senate.

The Egina Oil Field projected is located on OML130 and covering an area of about 500 sq. miles is said to be the largest oil and gas development project currently in the country.

The project was launched in 2013, with a target to commence operation in 2018.

The committee noted that at inception, the project was estimated to cost $6 billion but had undergone several cost variations first to $13.352 billion and currently $16.352 billion without proper record of how the huge sum had been spent or the reason for the variations.

It said that since inception of the project in 2013 (at almost 90% completion now) it has not been audited in any form despite incessant cost variations.

It said that allegations of corruption embroiled in the project that the Nigeria National Petroleum Corporation (NNPC) ought to have called for audit under the term of its contract.

The report said that the following variations were observed from the initial contract value:

SAIPEM contracting Nig. Ltd initial contract sum $2,941,615,322; Variation from the contract sum $805 million; FMC Technologies/TECHNIP initial contract sum $1,459,441,885; variation from the contract sum $33.07 million; Duco Ltd initial contract sum 4125,638,728; variation from the contract sum $4.5 million; SAMSUNG Heavy Industries Nig.Ltd initial contract sum $3,143,499,498, variation from the contract sum $33.5 million; Bell Oil and Gas Nigeria Ltd initial contract sum $42,876,268; variation from the contract sum $3.6million; Nov Oil and Gas Ltd initial contract sum $163,780,326, variation from the contract sum $52 million.

It gave the total variations as $1, 235,67 billion

On the use of local content, it said “For example, BELL Oil & GAS NIG.LTD bided for and got a line pipe contract of over $42 million, all the pipes used were directly imported by TOTAL itself and about N20 million was paid to Bell as training fees.”

On discrepancies in contract documents, the committee observed that most of the contract documents signed with Total and various contractors differed from those submitted to NAPIMS.

Its said, “Also there was documentary evidence from TOTAL showing that the value of the contract sum under the contract of SAIPEM Contracting Limited to be $3,200,000,000, however from a document before the committee derived through the Federal Government via NAPIMS/NNPC showed the contract sum as $2,700,000,000.

Contract payment ratio, it said that the least contract payment ratio by TOTAL was 80% US dollar and 20% Naira.

It said that “it was discovered that other major contractors paid their sub-contractors less to the ratio received from TOTAL thereby putting devaluation and inflationary pressures on the Naira. (The Nation)

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