its investment in a $16Billion deep sea offshore Egina oil Project being majorly undertaken by Total Upstream Nigeria Limited, TUNL, and other subcontractors.
Senator Solomon Adeola, chairman of the committee expressed the worry during the committee’s interactive session with the Managing Director of TUNL, Mr. Nicolas Terraz and his management team. He stated that Nigeria may not derived any benefits from the project expected to produce 200,000 barrels per day for the next 25 years including capacity building stressing that even 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.
“From information at the committee's 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”, the senator 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 to 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 a 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).