SENATE QUERIES ESCALATED PROJECT COST OF $10.3 BILLION DOLLARS AGAINST APPROVED COST OF $2.95 BILLION DOLLARS
The Senate Committee on Gas Resources chaired by Senator Bassey Albert Akpan yesterday, 6th June, 2016 commenced investigations into NNPC/Chevron Escravos Gas to Liquid (GTL) project and queried the rationale behind the escalation of project cost from the approved cost of $2.95 billion to a whopping amount of $10.3 billion, showing almost 300 % increase.
Senators were miffed that the same project, which cost $1.1 billion in Qatar could escalate to such a level. They sought to know from the management of the company why there was such an increase.
The management of Chevron Nigeria Limited led by its Chairman/Managing Director, Mr. Clay Neff and Director, NNPC/Chevron Joint Venture, Monday Ovuede laboured yesterday to adduce reasons for such incredible variation in the cost of the project. Giving reasons for the variation, the company representatives said community crises, militancy, soil texture, and other unforeseen circumstances, cost of imported equipment accounted for the cost surge.
Senators also sought to know why the project, which was initially awarded as a lump sum was changed to a re-imbursible contract model unilaterally “This is breach of contract”, Senator Bassey Albert , supported by other members of the committee said.
The committee also discovered that NNPC, a joint venture partner to the project has not made any investment to the project and has consistently failed to attend joint venture agreement meetings with Chevron.