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'Why NNPC Owns Only 25% Equity in EGTL'

Posted by From Donald Andoor in Abuja on 2005/08/26 | Views: 758 |

'Why NNPC Owns Only 25% Equity in EGTL'


Management of Nigeria National Petroleum Corporation (NNPC) yesterday gave reasons why it owns only 25 per cent equity holding in the multi-million dollar Escravos Gas To Liquids (EGTL) project in which Chevron Nigeria Limited holds the remaining 75 per cent. It also explained why the project cost was higher than the same one in Qatar.

Management of Nigeria National Petroleum Corporation (NNPC) yesterday gave reasons why it owns only 25 per cent equity holding in the multi-million dollar Escravos Gas To Liquids (EGTL) project in which Chevron Nigeria Limited holds the remaining 75 per cent. It also explained why the project cost was higher than the same one in Qatar.

NNPC Managing Director, Chief Funsho Kupolokun, told the House Committee on Petroleum led by Hon. Mercy Almona-Isei at a public hearing on EGTL controversy that the former management of "NNPC then told Chevron that we are not interested in the project and so conceded 100 per cent to Chevron."
He informed the committee that when his predecessor, Engr. Gaius Obaseki, came on board, he then briefed President Olusegun Obasanjo about the blunder committed by the then NNPC management before he was directed to re-open negotiations with Chevron management who eventually acceded the present 25 per cent equity holding.

Chevron Management led by Mr. E. O. Supo Shadiya, who appeared before the committee on Wednesday had said the technology for EGTL project is a sophisticated new one and probably, NNPC was apprehensive and therefore "decided to lower the risk."

Kupolokun, who led other management staff of NNPC, collaborated the position of Chevron on why the coat of the Nigerian project was higher than that of Qatar because of the differences in technology and the availability of facilities present in the two countries.

EGTL project being undertaken by Chevron Nigeria Limited has a value of $1.708 billion while that of Chevron costs $800 million.

He told the committee that the other reasons why the cost of EGTL project in Nigeria was higher was because of the "risk associated with Niger Delta region, site preparation and the devaluation of the Naira against other international currencies."

NNPC management, who appeared with Department of Petroleum Resources (DPR) officials, affirmed the position of Chevron that Nigerians were already being trained in South Africa to operate the machines for the project as deliberate efforts in compliance with the new policy of local content in the down stream sector of the oil industry.

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.