. Reps query $1.6bn contract variation
Minister of state for Petroleum Resources, Dr. Ibe Kachikwu, on Tuesday, laid to rest speculations that the Buhari administration plans to sell the Nigerian Liquefied Natural Gas Limited (NLNG) located at Bonny Island, Bayelsa State.
Speaking through the Director of Gas Resources, Mrs. Esther Ifejika at an investigative hearing held by the House of Representatives Committee on Gas Resources, the minister denied knowledge of such a plan.
Kachikwu added that the petroleum ministry is not aware of the federal government’s plans to sell the liquefied natural gas company.”We are not aware of the federal government’s plan to sell the NLGN,” the minister stated.
The investigative hearing is sequel to the adoption of three motions by the House, including that seeking to stop the proposed sale of the NLNG, probing the contract for the modification of EGP3B production platform following the joint venture agreement between the Nigerian
National Petroleum Corporation (NNPC) and Chevron Nigeria Limited and the contract for the upgrade of OML 58 upgrade 1, the execution of Obote/Ubeta/Rumuji pipeline and the northern option pipeline project.
At Tuesday’s hearing, the House committee faulted the variations on the OML 58 upgrade contract awarded by NNPC to Total E&P Limited on the grounds that the figures were too high since the real contract sum had been paid.
According to the lawmakers, the cost of the entire contract is staggering, insisting there was the need to ascertain if there was real value for monies paid to warrant the extra-payment through variation.But responding to the query, the NNPC informed the House committee that there was no infraction in the award of the entire contract, declaring that the contract award followed due process.
The NNPC Group Managing Director, Maikanti Baru, who was represented by the Chief Operating Officer, Upstream, Bello Rabiu, argued that the project is to upgrade security in order to improve gas for local and international consumption.
He said the contract was duly approved before it was awarded, adding that the contract suffered two variations amounting to $1.6 billion because of unforeseen circumstances and other challenges, including protests from host communities.
Baru disclosed that no money has been paid to any contractor as variation because the variation is yet to be approved by the NNPC’s board, adding that “we can’t accept any variation and no money was paid. It has to go to the board for approval”.
Meanwhile, the committee has demanded for all the necessary procurement documents leading to the award of the contract, such as minutes of the meeting of procurement planning committee, bid analysis, statistical analysis and NEEDS assessment in line with various sections of the Procurement Act 2016.
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