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Total’s $16B Ultra-Deepwater Project In Jeopardy

Nigeria’s Senate has expressed concern that the US$16-billion ultra-deepwater project that France’s Total is developing will not bring any money benefits to Nigeria’s economy, Senator Solomon Adeola said on Monday.

Total is developing the Egina oil project around 130 km (81 miles) off the coast of Nigeria and considers it one of its flagship and one of its most ambitious ultra-deep offshore projects. Total is the operator of Egina and its partners in the venture are CNOOC and Petrobras Sapetro. Egina is slated for start date in 2018 and is planned to have a production capacity of 200,000 bpd of oil next year. According to Total, 34 percent of the equipment for the project and platforms is expected to be produced in Nigeria.

Now a Senate committee is questioning the contribution to Nigeria the project will have, and has given one week to Total Upstream Nigeria Limited, TUNL, to provide more details on how Egina will benefit Nigeria, Senator Adeola said in a statement via his media advisor.

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The Senate also asks the Nigerian unit of Total to provide evidence of taxes it has paid, personnel employed, expatriate quota, salaries of local and foreign staff, and records of how much locally produced items such as pipes or plastics it has used for the Egina project.

“For the next 25 years, Nigeria may not get any benefit from this huge project at all as by law relating to the depth of the offshore Floating Production Storage and Offloading (FPSO) even royalty will not be paid to Nigeria within the period,” Senator Adeola said.

According to Adeola, the Egina project is the first of its kind in the Nigerian oil industry, and it is important to ensure that the country will derive the maximum benefits from it, considering that there are two other projects coming on stream.

By Tsvetana Paraskova for Oilprice.com

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