The federal government has received the report of the compensatory contracts and other incentives committee on the abandoned $1bn Kaztec Engineering Limited fabrication yard, located in Ilase village, Snake Island, Amuwo-Odofin Council, Lagos State
Submitting the report to the Minister of State, Petroleum, Mr. Timipre Sylva, in Abuja, Chairman of the Committee and Member of the Board of the Nigerian National Petroleum Corporation, Senator Magnus Abe, described the assignment as sensitive.
Members of the inter-ministerial committee were drawn from the Department of Petroleum Resources, federal ministry of defence, ministry of finance, ministry of justice and the NNPC.
The chairman explained that the federal government would not sit by and allow such humongous waste of resources on the project, stressing that aside the 3,000 jobs lost to the collapse of the facility, over $650m had already been expended on the abandoned project.
Abe noted that the facility was to add over 19 million barrels to the national oil reserve before Addax Petroleum declared a force majeure on the project which has not been operational since 2015 due to contractual issues.
The facility was designed to make it the first wholly indigenous engineering, procurement, fabrication, and offshore installation company to deliver complex offshore and onshore oil and gas projects until the operational challenges occurred.
“This has been a very sensitive assignment. This committee was inaugurated 14 August last year and we sought an extension and we have finished our task, submitted our interim report. But we thought the public needed to know what is happening on this project.
In keeping with that, we thought we needed a formal report. It is important that Nigerians realise what happened on this project. As we speak, this was a project that was to extract or add 19 million barrels to our existing reserves and would have been part of the daily national production.
“After that project was ready and everything was in place, contracts had been awarded and close to $1bkkn had been invested in it, addax petroleum called a force majeure on issues that were totally unrelated to this particular project at hand,” he lamented.