A Nigerian Senate committee asked Chevron to explain why a gas-to-liquids Joint Venture (JV) with the state-run oil company cost three times more to complete than initially estimated, Seeking Alpha reported.
The Chairman of the gas committee says the $10.3b invested in the Escravos facility was “astronomical,” given it was supposed to be built for around $3b, and it said Chevron may have violated the JV contract terms because it failed to consult partner Nigerian National Petroleum on running over budget.
Isabel Ordonez, a Houston-based Chevron spokeswoman, declined to comment when contacted by e-mail by Bloomberg. On his side, Monday Ovuede, the Director of the NNPC and Chevron Nigeria JV, told the committee that Chevron had acted in a “reasonable and prudent manner” carrying out the project. NNPC officials failed to attend several meetings and decisions had to be made to go ahead.
The 33,000b/d Escravos gas-to-liquids plant began production in mid-2014, churning out mainly synthetic diesel, according to Chevron’s website. The plant supplies clean-burning, low-sulfur diesel fuel for cars and trucks, it says.