Senate queries Chevron over $7.4bn contract inflation

08 June 2016, Abuja – The Senate Committee on Gas,yesterday, alleged that oil firm, Chevron Nigeria Limited, CNL, illegally inflated the Escravos Gas-to-Liquid Project, EGRL, from $2.9 billion to $10.3 billion, an increment of $7.4 billion.

Senate Chambers, Nigeria5

Senate Chambers, Nigeria

To this end, the committee, headed by Senator Bassey Albert Akpan,PDP, Akwa Ibom North East, demanded from the company all records of the contract said to have been awarded in 2009.

Speaking on behalf of the committee, during commencement of investigation into the alleged inflation of the contract, Akpan queried Chevron Nigeria Limited,CNL, for increasing the contract sum without recourse to its partner, the Nigerian National Petroleum Corporation, NNPC.

Akpan decried Chevron’s action for increasing the contract sum at such magnitude, noting that by such action, the oil firm had deliberately 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.

Senator Bassey, who said investigations into the EGTL project was also done by the 6th and 7th Senate, pledged that the 8th Senate would conclude the investigation within the shortest possible time. He said:  “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.”

 

  • Vanguard
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