REMARKS BY THE PRESIDENT OF THE SENATE OF THE FEDERAL REPUBLIC OF NIGERIA, HIS EXCELLENCY, (DR.) ABUBAKAR BUKOLA SARAKI, CON, AT THE INAUGURATION OF THE AD-HOC COMMITTEE ON INVESTIGATION OF LOCAL CONTENT ELEMENTS ON EGINA OIL FIELD – DECEMBER 20, 2017
PROTOCOL.
1.It gives me great pleasure to be inaugurating the Ad-Hoc Committee on Investigation of Local Content Elements on the Egina Oil Field. I welcome all the distinguished members to this important event, which should beam a searchlight on the Egina Oil Field development, and assist us in our quest to unravel what may have gone awry in the local content component of the project.
2.Earlier this month – 5th December to be precise – the 8th Senate deliberated on a motion on the local content elements and cost variations relating to this project. We are grateful to the Chairman of the Senate Committee on Local Content, Distinguished Senator Solomon O. Adeola who sponsored that motion, which was so-sponsored by 18 of our distinguished colleagues. I want to say that the sponsors of the motion acted as true servants of the people, in helping to channel the concerns of Nigerians about this project, particularly with its compliance to the Nigerian Oil and Gas Industry Content Development Act of 2010.
3.As we all know, the Egina Project was conceived to contribute an additional 200,000 barrels per day to Nigeria’s oil production, as well as the associated gas for the domestic market, when it comes onstream in 2018. Egina is a big deal, indeed, and is rightly celebrated as the largest oil and gas development project currently under way in Nigeria.
4.Ordinarily, it should be good news that Egina also boasts the largest local content component of any project of its kind in this country – comprising employment, fabrication, training and infrastructural elements. This means that some 24 million man-hours should be situated in Nigeria, which is equivalent to about 3,000 persons working on an ad-hoc basis, on average, over a period of five years – that is about 77 per cent of the project workload. Egina would also require 60,000 tons of equipment fabricated locally; and catalyse human capacity development training totaling about 560,000 man-hours.
5.All things being equal, the Egina project should not only boost Nigeria’s oil production by approximately 10 per cent, it would go a long way in accelerating the upward curve of our recovering economy. To a greater or lesser degree, it would also facilitate many of our associative economic goals, including: the need to increase domestic gas production for Nigeria’s burgeoning market; stimulating local production especially the Senate’s Made-In-Nigeria drive; job creation to usefully engage our teeming ranks of the unemployed; and capacity building to confer better sets of skills for the job market.
6.Worryingly, from the information being received by the Senate, the reality may be somewhat at variance with conception, and this project may have veered off course with regard to local content. It is our duty, therefore, to investigate and ascertain the true position of things. We must see it as a patriotic duty to ensure that this project delivers on all its promises and potentials, so that our economy can begin to reflect the impact, and the Nigerian people can see the positive difference in their lives.
7.It is also a matter of serious concern to note that the project has been subject to several cost variations, resulting in a hike in estimates from 6 billion to 16 billion dollars over a period of ten years. As you know, part of our focus in the Budget process is that we must insist on Value-for-Money on all contracts – and Egina is no exception. There must be transparency and accountability, because the money expended on projects is the common patrimony of our people. So, we really must find out what is going on with Egina Oil Field development; we must diagnose its true health.
8.We resolved in our debate of 5th December to – amongst other things – ensure that: there are no more changes that would bring about further cost variations; and to see how the variations done so far have impacted on the scope and objectives of the project, as well as its local content component. How that local content delivery thus far has matched up to the design of the project at the outset, is also a major plank of this Committee’s investigation.
9.Distinguished Colleagues, Nigeria’s multi-billion dollar investment in this project is just too staggering for us to tarry in this investigation. We have not, as a country, made a kobo from this project. We want to ensure that we can start to do so before too long; and that all the advantages filter down to our people. Our level of toleration for the current state of affairs with regard to Egina, will have implications for other deep offshore projects, going forward.
10.I am confident that the carefully selected members on this committee have the requisite dedication and commitment to carry out the task on behalf of the nation. I wish you success.
11.On that note, the Ad-Hoc Committee on Investigation of Local Content Elements on Egina Oil Field is hereby inaugurated, to the glory of God and the greater development of Nigeria.
Thank you.
THE PRESIDENT OF THE SENATE.
