The Leader of Akwa Ibom State Caucus in the National Assembly, Abuja and chairman, Senate Committee on Petroleum Resources Upstream, Senator Bassey Albert Akpan (OBA) has said that the successful resolution of the Escravos Gas to Liquid (EGTL) project, an NNPC/Chevron Joint Venture, is one of the many remarkable feats of the Senate and a fulfilling moment in his service to the nation.
In a public lecture at the University of Uyo, his alma mater, on Monday, December 13, 2021, Senator Albert said ending the decade-long EGTL cost rift, instantly led to an estimated $6bn being saved in the process for Nigeria.
“I felt a deep sense of purpose and satisfaction spearheading the negotiations in the interest of our dear nation. In January 2020, the Federal Government found me worthy and honoured me with an award following the role I played in helping to increase the revenue base of the nation devoid of politics that characterize the oil and gas industry. The moral lesson here is that as patriotic citizens we should strive to put the country first above our personal gains,” he added,
Senator Albert in his lecture entitled “Oil, Gas, and Politics: Unbundling the Conundrum for National Development” lamented that the euphoria of oil discovery and commencement of commercialization in 1958 tended to have blinded the eyes of Nigerians as there was no realistic provision to manage produced Gas in association with crude oil, hence some lapses that counted against us as a nation.
He said, “The government never stipulated laws for policy framework during the nascent period of our oil production history. The intricate mixing of politics and the oil business appeared to have worked against the nation at the expense of planned economic growth.
“The effect could be felt in several ways, for example, rent-seeking dominated the scenes in the early ’60s. Another feature of such political interference could also be in the Escravos Gas to Liquid (EGTL) project, an NNPC/Chevron Joint Venture Project debacle recently resolved in the interest of Nigeria and the lead investor.”
According to him, the EGTL project conceived in 2005 was structured to boost the domestic market with 400 million standard cubic feet of gas per day but that the project suffered a setback because of the inability of the Federal Government of Nigeria, through NNPC and the principal partners of the project, Chevron (Nigeria) Limited (CNL), to facilitate the workability of the 75 per cent to 25 per cent respective share for the 33,000 barrel per day (BPD) Gas to Liquid plant.
“The project was completed in 2014 for an estimated capital cost of over $11bn and located 100km South-East of the commercial nerve centre of West Africa (Lagos). The conceptualization had three fundamental goals of enhancing the domestic supply of gas in Nigeria; supply of gas to the West African Sub-region through the West African Gas Pipeline (WAGP) and the international sales of gas to liquid products to earn foreign exchange,” he added.
The senator further explained that the project concept provides for an expansion from 33,000 to 120,000 BPD within ten years of its usage, specifically designed to convert natural gas into petroleum products which are approximately 70 per cent premium quality diesel, while it would also produce a quarter of the total domestic gas demand in Nigeria and yield a minimum of $2bn annually in revenue and $30bn in the next decade.
He revealed that with the huge prospects, the 8th Senate, under Senator (Dr) Bukola Saraki, mandated its Committee on Gas Resources to engage both parties – FG and the CNL to end the more than a decade long cost contention dispute over the EGTL.
He said the Senate Committee on Gas Resources, headed by him, swung into action, with a detailed investigation to resolve the cost contention which had escalated from an initial $2.95bn approved in 2005 to a whopping over $11bn completion cost, whereas a similar project in Qatar was conceptualized and developed with a far less figure.
According to him, the Senate’s intervention through robust rounds of negotiations yielded the needed result as both parties agreed for reversal of the equity shareholding on the plant from 25 per cent (NNPC-FG) and 75 per cent (CNL) to 60 per cent (NNPC-FG) and 40 per cent (CNL) and facilitated the signing of the renegotiated joint venture agreement.
The two-term Senator disclosed that President Muhammadu Buhari having been satisfied with the spectacular handling of the deal, gave the management of the NNPC approval to conclude and execute the relevant agreements which was appropriately effected on December 24, 2019, with the signing of the agreement between the Federal Government, through the NNPC and CNL, signalling the settlement of the decade-long EGTL cost rift, in which an estimated $6bn was saved in the process.