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Osinbajo: Local Content Responsible For $16bn Egina FPSO Success



Acting President Yemi Osinbajo over the weekend described the signing of the Executive Orders on local content and the liberalisation of the oil and gas logistics sector for the success recorded in the fabrication of Egina FPSO in Nigeria.

Osinbajo who stated this over the weekend when he visited the Egina FPSO at the Lagos Deep Offshore Logistics (LADOL) in Lagos said the liberalization of the oil and gas logistics sector by the President Muhammadu Buhari’s administration also helped achieved success for the Egina FPSO project.

Recall that the Egina FPSO was located 130 kilometers off the coast of Nigeria at water depths of more than 1,500 meters. The Egina oil field is one of Total most ambitious ultra-deep offshore projects.

Primarily developed locally to accelerate the pace of Nigeria’s industrial fabric and the transfer of technology, the project is expected to come on stream and produce 200,000 barrels of oil per day. But, according to Osinbajo, “With respect to Nigerian content and this is a very key area where the Egina project has excelled.

“Very rightly, it has proved the point that we have made all along. The President has signed so far two Executive Orders on the issue of local content. Aside from the great work of the local content board, which is what brought the Egina project to fruition, the president has also signed two other executive orders, Executive Orders 3 and 5 emphasising the requirement that wherever local content is available, we will use local content.”

The acting president further stated that the current administration has laid a foundation for the Nigerian economy to be driven by the private sector. “We have laid the foundation for the Nigerian economy and the way we want to see the Nigerian economy grow. The first is that we strongly believe that the Nigerian economy must be private sector led.

“This project for example is a $16 billion project in naira terms that is about N5 trillion, the entire Nigerian budget is about N9 trillion and our spending on infrastructure, which is the largest in the history of Nigeria is N1.5 trillion. So, it tells you that this project alone is several times more than the federal government spending on infrastructure. This is the story of developed economies, they are private sector driven, and there is no way that government’s revenue can possibly satisfy the demand.”

Speaking on monopoly, the Acting President said even though every businessman want to enjoy monopoly, the economy would boom only when there is healthy competition. “The second part is monopoly, it is a fact that monopoly will raise its head, every business man wants a monopoly. This has always been the struggle between government, regulators and operators.

“This is why the federal government’s policy has been one of trying to ensure that we do not permit monopoly, that we open up the space so that there will be competition. It is very obvious now that there is no monopoly which is an important part of encouraging investment and of course making the environment much more lucrative for those who are doing business.

“The fourth point is about enabling business environment, ensuring that the business environment is such that it makes sense for people to invest here. All the critical issues like getting licenses, getting contract signed are being worked on,” he said. 

Osinbajo also said that the next point of anti-corruption fight is the public service adding that the nation can only experience progress if corruption is defeated. “We have not even got to a point where we will be looking at public service and people doing all sorts of things, that is next phase and that phase is important. This country can only work if we are able to deal with corruption.

“When people put their financial interest over what will benefit the entire nation, we are never going to be able to makea progress. A project like this is able to be held up just because somebody is not granting approval. For us, it is not just about creating the right business environment but creating the right attitude.

“Part of it is corruption; part of it is just the graft that attends all of these kinds of activity. I was talking with someone last week and said that the fight against corruption in Nigeria so far what we have been able to do is to check grand corruption. Namely just going to the treasury and taking money out of the treasury and share them. We have been able to stop that because you will not find the president signing off on asking the Central Bank to move out large sums of money.

“Every Nigerian knows that President Buhari will not do such a thing. And because we have been able to stop that corruption, we are investing, despite earning 60 per cent less revenue, almost five times more than the previous government on infrastructure,” he said.

While lauding the supports received from its partners, chairman of LADOL, Mr. Ladi Jadesimi, stated that the achievement of the project was a pointer to the growth of local content and capacity of Nigeria’s operators in the oil and gas business as well as the economy of the country.

“LADOL has demonstrated that there are talents in Nigeria and ease of doing business is very much accommodating as well as encouraging. We have grown from how we started in 2001 and have made Nigeria a hub and opportunity for prospective businesses to come in. We will continue to grow our capacity and ensure that more projects are done in Nigeria order than encouraging capital flight,” Jadesimi said.