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Abstract
A report for Nigeria's Senate Committee on Gas Resources found that Chevron Nigeria Limited, which is the project's major developer with 75% interest, "had, without the approval of its joint partner, the Nigeria National Petroleum Corporation, suspended the initial contract terms and opted for a higher cost peg, complaining of'sudden worldwide price escalation in engineering, steel and technical services,"' according to the report.
The Committee report's conclusion: "The committee, although conscious of the fact and appreciates worldwide increase in project cost from 1999-2008 in the oil and gas industry, frowns at the EGTL cost escalation. Chevron's increase of the contract sum from US$2,721 billion to US$5.9 billion without NNPC's concurrence is unacceptable and sanctionable."
'The Committee only said NNPC's failure was 'regrettable' and recommends the establishment of a technical cost evaluation team between the NNPC and Chevron and other partners."