Nigerian govt denies plans to sell NLNG
NEWS DIGEST – The federal government has denied that there are plans to sell the Nigerian Liquified Natural Gas Limited, NLNG.
This fact came to light on Tuesday as the Minister of State for Petroleum Resources, Ibe Kachikwu debunked the allegation during an investigative hearing on three motions by the Fred Agbedi- headed House of Representatives committee on Gas Resources and Allied Matters.
“We are not aware of any plans to sell LNLG by the federal government.” Kachikwu said Tuesday at the hearing which amongst other issues was addressing the “Need to stop the sale of the Nigerian Liquified Natural Gas Limited.”
The minister was represented by Mrs. Esther Ifejika, director Gas Resources. The Director was emphatic when she was questioned by the committee members on the alleged plan to sell the NLNG.
However, Ifejika who said the presentation of the Ministry and the Nigerian National Petroleum Corporation were harmonized could not proceed further at the hearing as the committee discovered glaring discrepancies in the documents of the Ministry and that of NNPC presented by Bello Rabiu, Chief Operating Officer, Upstream who represented the Group Managing Director, Baru Maikanti.
The committee also said the two documents submitted were not authenticated as they were not signed.
The rep of the GMD noted that the document may be different but the figures are the same, but that they could take it back for authentication.
However, the lawmakers queried the Nigerian National Petroleum Corporation and the Ministry of Petroleum Resources over some staggering increases in the upgrade contract of OML 58 and the execution of the Northern Option pipeline.
It was learnt that the NNPC entered into a JV with Total Exploration and Production Nigeria Limited ( TEPNG) and there was a Modified Carry Agreement and award to TEPNG to execute the OML 58 Upgrade 1 in 2008, Obite- Ubeta- Rumuji ( OUR) pipeline in 2010, and the Northern Option Pipeline in 2011.
But Rabiu in defence of the NNPC told the lawmakers that no money had been paid on the variations.
TOTAL E&P who handled the JV contract said the initial contract sum was $ 3.45 billion but was eventually increased to $4.6 billion after consideration of a number of factors.
But members of the Fred Agbedi- headed committee were not happy over the huge variation in the contracts totaling over $1.15 billion.
Patrick Olinma, Executive Director, Asset management and New energies, who represented the Managing Director of Total said it had made submissions on all the issues raised and that the documents have been submitted to the committee
However, the committee members posited that the reason for the variations was because the contractor engaged by Total was incompetent resulting in the extra cost. According to the members, the allegation was made by the NNPC and yet Total went on to engage the contractors.
But the Total representative said that they had a duty to comply with the local content act, adding that they were initially told by the government there were 14 communities which ended up at 74 communities eventually.
The chairman of the committee said though the parliament made the law, it did not say that the contractor should be employed “as a learning curve,” adding that the cost is too staggering.
The committee said it would like to see the boards resolution on the contracts before it was awarded to ensure they comply with procurement laws.
Sunday Katung, (PDP Kaduna) who moved the motion to investigate the contract said the JV contracts, attracted a variance beyond the projected budget sums.
“I deemed it expedient to draw the attention of this house to these projects to ascertain wether of all the change orders presented to the NNPC and / NAPIMS, there were any approval for these requests since monies have been paid and further, wether there is value for money spent on those projects.”