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Reps
probe Bonga oil field contract
By Uchenna Awom
National
Assembly
Correspondent,
Abuja
Legislators think there is
something fishy about the production sharing agreement between the
Nigerian National Petroleum Corporation (NNPC) and Shell Nigeria
Exploration and Production Company Limited (SNEPCO), and are revving up
for a public hearing on it, based on their findings.
The House of Representatives
wants to gather more facts on the contract for the construction of the
Floating Production Storage and Offloading (FPSO), facility popularly
called the �Bonga Oil Field�, located in OPL 118 deep offshore in the
Niger Delta.
Bonga, designed with
facilities to produce 225,000 barrels of crude per day (pd) and 170 mm
cubic feet (cf) of gas pd and with a capacity to store two million barrels
of oil, is said to be the biggest FPSO in the world with a proven 700
million crude reserves.
It was slated to produce its
first oil in April, 2003 with an initial budget of $2.92 billion (N408.8
trillion), but the cost, according to reliable sources in the House
committee, was jacked up to $3.658 billion with a first oil date of July
2005.
The hearing is preceded by a
month-long investigation by the House Petroleum Sub-Committee on National
Petroleum Investment, chaired by Bethel Amadi.
The panel now wants to
establish the reasons for the delay and for the $750 million increase in
cost over and above the approved budget in 1999.
A reliable source said the
investigation discovered that the astronomical increase has a link with
�deliberately circumventing� the tender and pre-qualification procedures
in the award of the contract to build the �Top-Site, Offshore integration
and commissioning� by the NNPC.
It was learnt that the probe
report stated that the NNPC, during the tendering stage for the project,
kept re-instating bidders who had failed pre-qualification; but the major
reason for the problem was that the NNPC deviated from the contract award
procedure.
It reportedly caved in to
pressures that the contract be awarded to the lowest bidder and instructed
SNEPCO to award it to AMEC of the United Kingdom instead of ABB that won
the bid; so that the NNPC would not be seen as the government agency that
circumvented procedure.
The contract for the
�Top-Site� project, which was approved in 1999, was not awarded until
February 2001 even when it was slated to be awarded in 2000.
According to the report, AMEC,
which has its yard in Wallsend, UK, proved its incompetence as it returned
to the Bonga site without completing the project and instead started
ferrying its manpower and equipment to the site at a heavy cost.
To cover up the inadequacies,
the company allegedly informed SNEPCO on arrival that it has 200,000 man
hours left to complete the job in London and gave the impression that it
can be completed in Nigeria.
Upon investigation on the
site, the Shell subsidiary established that contrary to the claim, 650,000
man hours were left undone, showing a 68 percent underestimation by AMEC,
which meant that none of the other contractors will move to the site until
the job is completed.
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