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FG insists on transparency in Total’s $2bn Egina project

By Oscarline Onwuemenyi with agency reports

ABUJA – The Federal Government has called for transparency and an effective system that increases international investors’ confidence, even as French oil giant, Total, is set to open tender covering various packages on its deep-water Egina project in Nigeria.

The Total operated Egina oil field is located 150km off the coast of Nigeria, The French oil major, which has 24% stake in Egina, plans to sign the contract by the end of 2012, and to begin production from 2015.

Industry sources said bid documents will be issued to shortlisted contenders for a new-build floating production, storage and offloading, FPSO vessel, subsea umbilicals, risers and flowlines as well as a subsea production system.

President Goodluck Jonathan recently visited South Korea during the Nuclear Energy Summit, and used the visit to woo foreign investors from South Korea to Nigeria.

Besides, the government has been wooing investments from other climes. But, according to industry sources, the government is not going to gloss over issues on transparency and the strict adherence to the local content laws.

It is believed that the delay in the award of the Egina contracts, which started some years ago must be as a result of government’s efforts to ensure transparency not just by Nigerians, but by the international community.

Market sources calculated that local content requirements could drive up the cost of the 2,000,000 barrel-per-day FPSO by about $500 million, so investors are keen to ensure work exists beyond Egina to sustain their investments and allow for a fair return on capital.

The Surf and SPS packages, however, are rather more straightforward because capacity does exist in Nigeria to meet local content needs.

Industry watchers are therefore keen to see if President Goodluck Jonathan will keep the promise of transparency for the Total projects.

One source said competition is tough for the $1.4billion Surf order, although Italy’s Saipem with its huge Rumuolumeni Yard in Port Harcourt, Rivers State, is in a prime contender because it also secured the Surf packages for both the Usan and Akpo fields also operated by Total.

Other contenders include Technip, the new Acergy-Subsea 7, and two Nigerian players, West African Ventures, WAV, and Nestoil.

This package calls for about 40,000 tonnes of hardware, including 32 kilometres of production flowlines, 23 kilometres of water injection line and 75 kilometres of gas export pipeline.

For the $600million SPS package, involving 44 Christmas trees plus associated hardware, the contenders include Cameron, which supplied the subsea hardware on Usan and Akpo as well as FMC, Vetco and Aker.

All the Egina contracts were due for award last year but due to ongoing delays, first oil has been pushed back from 2014 to 2015.


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