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As the investigation into the local content component and cost variations of the Total Upstream Nigeria Limited $16 Billion Egina Deep Sea Oil Project continues, the Senate has declared that there is an urgent need to amend the Nigeria Oil and Gas Industry Content Development (NOGICD) Act, 2010 as its is currently not achieving the aims for which it was enacted with Nigeria and Nigerians being the big losers.

The chairman of the Senate Ad-Hoc Committee on Investigation into the Local Content and Cost Variation of $16billion Egina Deep Sea Project, Senator Solomon Adeola (APC, Lagos West) made the declaration at the one of its sitting over the weekend as the investigations has shown various loopholes in the Local Content Law that are being exploited by foreign companies with some local collaborators.

“From what we are discovering in this investigation, it is clear that the Local Content Act is not achieving much result with Nigeria losing billions in expatriated hard currency and not much local skill or transfer of technology taking place. We have a case of award of a contract of $42million to a supposedly local company by Total Upstream Nigeria Limited under the Egina Project with Total making direct payment to another foreign company on behalf of the local company in just a pipeline procurement contract without the money passing through the Nigerian company. This is unacceptable and is a way of circumventing the NOGICD Act. It is apparent that indigenous companies are just being used as conduit pipe when they are used at all.” Senator Adeola declared.

He said already the committee had made startling discoveries of “unqualified foreign companies” like NOV Oil and Gas Nigeria Limited cornering multi-billion dollar contract that should ordinarily go to Nigerian companies from Total Upstream while various kinds of suspicious variations of original contract sums running into millions of dollar are embedded in the Egina Project stressing that it is either the regulatory mechanism under NOGICD is not embracing or there are collusion to undermine its efficacy.

He said the new amendment to the Act will seeks to place final approval for projects and its execution under the NOGICD Act in the National Assembly to ensure strict compliance adding that from revelations so far many things are being done wrongly to the benefit of International Oil Companies (IOCs) and a few local collaborators.

A member of the committee Senator Chukwuma Utazi (PDP, Enugu) who revealed that before becoming a Senator he was part of the civil society group that fought for the passage of NOGICD Act regretted that from what is being revealed, it seems that all Nigeria have done is to get local collaborators to IOCs to fleece Nigeria of its resources adding that if Nigeria companies cannot benefit from mere procurement contracts, it is unlikely we benefit from technical aspects of the oil and gas industry contracts.

During the proceeding Mr. Mario Lagunes, the managing director of FMC Technologies Nigeria Limited, a Mexican, that got a subsea pipe contract that was varied from $1.3billion to $1.6 billion on the Egina Project told the committee that his Nigeria company is 100% owned by a parent company in Netherland and its dividend are paid to the offshore owners.

The committee frowned at a situation where three quarters of FMC Technologies Limited procurement were purchased abroad with approval of regulatory bodies in flagrant contravention of the NOGICD Act.

It will be recalled that the Senate Resolution to investigate Egina Project was passed to ensure Nigeria derive benefits from the project and to avoid any lapses that may be discovered in two similar offshore projects namely Bonga Southwest, Aparo and Zabazaba that are on stream to come up in the industry. Other companies involved in the Egina Project that appeared before the Committee and requested to re-appear with Total Upstream Nigeria Ltd and Samsung Heavy Industry (SHI) this week include Dorman Long Nigeria Limited, AVEON, Bell Oil and Gas Services Ltd, EWT Services Ltd and DUCO Technic Offshore Ltd.

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