The Senate Ad-Hoc Committee investigating Local Content and cost variation on the $16 Billion Egina Deep Sea oil project has discovered an huge variation of about N500 million from what the Federal Government through NAPIMS approved for a component of the project and the amount Total Upstream Nigeria Limited, the main operator of the project awarded it to SAIPEM Contracting Nigeria Limited.
The committee made the discovery in continuation of its investigation of the multi-billion dollar offshore oil project that will produce 200,000 barrels per day in course of its interaction with SAIPEM Contracting Nigeria Ltd handling underwater umbilicals and all under connecting links of the Egina project.
The Managing Director of SAIPEM Contracting Limited, Mr. Guido D’ Aloisio has stated that with documentary evidence from Total Upstream that the value of its contract amounted to $3.2 billion while the approved amount from a document before the Committee by the Federal Government through NAPIMS/NNPC is $2.7billion.
Senator Solomon Adeola (APC, Lagos West), the chairman of the committee and other members of the committee faulted the figure in SAIPEM document and said for record purposes it will rely on the figure from government agency involved in the transaction and not a private concern.
“Between the letter of approval by NAPIMS in March, 2012 and April 2013 when Total awarded the contract to SAIPEM, there was a discrepancy that cannot be accounted for by currency fluctuations as the costing was 90% denominated in dollar with only 10% in Naira. So exchange rate fluctuations could not be responsible for the discrepancies” Senator Adeola stated.
He therefore directed that NAPIMS and Total Upstream be invited to come and clarify the discrepancy adding that the explanation of SAIPEM Contracting Ltd amounts to cost variation through the back door after the approval of NAPIMS.
Earlier Mr. D’ Aloiso disclosed that SAIPEM has been operating in Nigeria for the past 50 years and had been operating local content in all its projects even before the Nigeria Local Content Act of 2010 stressing that at present they have surpassed local content targets according to the NOGID Act.