Terraz says Total achieved $603m cost savings on Egina project, Senate disagrees

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The Managing Director of Total Exploration and Production Nigeria Ltd. (TEPNG), Mr. Nicolas Terraz, has disclosed that the 200,000 barrels per day Egina oil project which encompasses a 330 metre long Floating Production Storage and Offloading (FPSO) platform designed to process oil from the field from December 2018, would be completed at about $603 million below its original budget of $16.354 billion, THISDAY reports.

Terraz, who spoke during a public hearing of the Senate Ad-hoc Committee investigating the local content elements of the Egina oil field project on Tuesday in Abuja, explained that the initial budget established in 2013 for the Egina project was $16.354 billion, but that after extensive cost optimisation by Total and its partners, this figure was revised downwards to $15.751 billion in May 2013. He stated that a Final Investment Decision (FID) on the project located in Oil Mining Lease (OML) 130 in the Niger Delta region was then made on the basis of this reduced budget figure.

Terraz’s disclosure was however contrary to allusions by the Senate Ad-hoc Committee led by Senator Olamilekan Adeola, and with members like Senators Godswill Akpabio, Stella Odua, Kabiru Morafa and Tanimu Aduda among others, that the procurement processes for the project were unclear and needed to be audited to ensure that Nigeria was not shortchanged by the parties in it. Also not satisfied with the explanations made by Total, the committee directed the NNPC to conduct a technical and financial audit on the project expenditure so far, and submit same to it.