From Fred Itua, Abuja
The Senate has commenced investigation into the inflation of the contract sum of the Escravos Gas To Liquid Project (EGTL) from $2.9 billion to $10.3 billion, an increment of $7.4 billion.
Senate Committee on Gas at a public hearing, queried Chevron Nigeria Limited (CNL) for increasing the contract sum without recourse to its partner, the Nigerian National Petroleum Corporation (NNPC).
Chairman of the Committee, Senator Bassey Akpan (PDP, Akwa Ibom, North East), berated CNL for inflating the contract sum, stressing that the company violated the terms of the Joint Venture agreement.
He wondered why the Nigerian project with 33,000 barrels per day capacity would cost $10.3 billion while a similar project in Qatar with 34,000 barrels per day was constructed for $1.2 billion.
Bassey who said investigations into the EGTL project was also done by the sixth and seventh Senate, pledged that the eight Senate would conclude the investigation within the shortest time.
“So between 2008 and now the project cost had risen by an additional $5 billion and this is quite worrisome. We need to sit down and look at the cost, it is quite astronomical for you to have the cost that was approved at $2.99 billion with a completion cost of about 10.3 billion.
“We are going to guide our decision by the venture agreement and every other related Act of the National Assembly. We would frown at anybody who breaches the law.
“I am not satisfied with the explanation they have given. How can I be satisfied? As a Nigerian, I am not satisfied, but we need to listen to NNPC. I want to assure Nigerians that we would get to the bottom of this,” he said.
The committee also queried why the share ratio on the EGTL project was 75 per cent to Chevron and 25 per cent to NNPC when all other similar ventures between the two were 60 to 40 per cent.
In his response, the director in charge of NNPC/Chevron Joint Venture, Mr. Monday Ovuede, said CNL did not violate the Joint venture agreement as it had invited the NNPC on several occasions to meet.
He said at the time it was evident that the contract had to be reviewed, it notified NNPC and called for meetings an several occasions which the NNPC shunned.
He said the company was left with two choices: either to forget the over $2 billion investment and abandon the project or go ahead with the project.