Samsung Heavy Industries (SHI), one of the major companies handling the $16 Billion Total Upstream Nigeria Limited Egina Deep Sea oil project had its contract of about $3.1billion varied to $3.5Billion in one of the numerous variations in the cost of the deep sea oil project.
This revelation came to light when executives of the Korea company including Dr. Imo J Imo, the Chief Operating Officer, Mr.Cheal Jeong, the project manager and Mr. Dea Shin together with other subcontractors of the project appeared before the Senate Ad Hoc Committee on Investigation into the Local Content and Cost Variations of the $16 Billion Egina Offshore oil project.
Dr. Imo had told the committee that the contract from Total Upstream Nigeria Limited was varied by $362.140million arising from re -ordering of work order and fluctuations in foreign exchange adding that there is likelihood of further variations in the final installations of the Floating, Production, Storage and Offloading, FPSO, which arrived the country a forth night ago from Geoje, South Korea.
So far the Committee has uncovered variations to the tune of almost $1billion in various sub contracts of the $16billion project.
Senator Solomon Adeola, (APC, Lagos West), the chairman of the Ad Hoc Committee directed the Samsung Heavy Industries to submit the list of all their sub-contractors, the values of their contracts and reasons for the various variations in their contracts adding that the committee find it hard to believe most of the variations hinged on foreign exchange fluctuations as the contracts were denominated preponderantly in dollars.
The Committee chairman stated that it is bewildering that most of the contract documents from NAPIMS signed with Total Upstream Nigeria Limited differed from those of the contractors signed with Total Upstream on the same contract adding that initial contract agreement by Total on the Egina project does not reflect the various variations.
He pleaded with all concerned in the investigation to continue to cooperate and not impede the investigation in any form as the outcome of the investigation will serve as a benchmark for similar projects in the future.
In his contribution at the hearing Senator Godswill Akpabio, the Minority Leader of the Senate and vice chairman of the committee stated that the Senate set up the Ad Hoc committee in view of what it considers as the astronomical cost of the project stressing that in some quarters the project would not have cost more than $7billion but ballooned to $16 billion and still counting.
However, the Group General Manager of NAPIMS Mr. Roland Ebuwuare, who represented both the Group Managing Director of NNPC, Mr. Maikanti Baru and Chief Operating Officer NNPC (Upstream) Alhaji Rabiu Bello stated that from his view, Total Upstream Nigeria Limited has not done anything untoward in the Egina project adding that in deep water project of this nature there are latitudes for contingencies and variations in cost with mechanism for resolving discrepancies at the end of the project.
Mr. Nicholas Terraz, the managing director of Total Upstream Nigeria Limited said they are on the side of Nigeria in the investment of $16billion with the project poised to benefit Nigeria and all partners adding that they expect to complete the project within the $16 billion budget.
Already a value for money audit has been ordered by the Senate on the project and the audit is expected to last for 16 weeks.
Other companies that appeared with Samsung SHI are Ladol Nigeria Limited, FMC Technologies Nigeria Limited, NOV Oil and Gas Nigeria Limited, Dorman Long Nigeria Limited, Bell Oil and Gas Nigeria Limited, Ponticelli, NigerDock Nigeria Limited AVEON and EWT.