Nigeria’s fabrication sector is set to witness more Foreign Direct Investments (FDI) as the oil companies are focusing on at least 50 per cent of local fabrication of infrastructure for deepwater oil exploration.
Already, Nigeria is gaining strength in fabrication and integration of Floating Production Storage and Offloading (FPSO) vessels usually executed abroad. The Nigerian Content Development and Monitoring Board (NCDMB), currently championing this course, has challenged the Nigerian oil and gas industry to strive to develop local capacities to execute full fabrication and integration of FPSO, vessels in-country within the next eight years.
Executive secretary, NCDMB, Engr. Simbi Wabote expressed satisfaction during his inspection of the Total Exploration and Production Nigeria Limited’s Egina FPSO docked at the Samsung Heavy Industry, SHI-MCI Yard, LADOL Free Zone.
The executive secretary commended Total E&P for setting high Nigerian Content benchmarks with the Egina project, in engineering, fabrication, testing, coating and integration, stressing that the challenge for forthcoming projects would be how to raise the bar. “Our aim is to stretch the limit to get more for Nigeria.
“Our aspiration is that come the next seven to eight years, full integration of an FPSO must happen in Nigeria” he said. Already, the board and major operating companies are working towards full domiciliation of FPSOs.
LEADERSHIP learnt that the Zabazaba deepwater project being promoted by Nigerian Agip Exploration Limited (NAE) in partnership with Shell Nigeria Exploration and Production Company (SNEPCo) and the Bonga South West Aparo (BSWA) deepwater project, also developed by SNEPCO have been planned to domicile 50 per cent of the fabrication of modules and integration of the FPSOs.
Wabote also charged other operating companies in Nigeria to take a cue from Total’s can-do attitude and their fervent belief in the Nigerian capability. “When the oil price fell to almost $27 a barrel, they did not stop the project. They continued and Nigerians were engaged.” The first key step he said, is for companies “to stop looking for waivers and change the default thinking from ‘it cannot be done here’ to ‘what do we need to do to make it happen’” he said.
He also affirmed that the Egina project has changed the narrative about the capacities and capabilities of oil servicing companies in Nigeria. According to him, “the project simply raised the bar in local participation in various scope covering the Wells, Subsea Production Systems, Umbilicals, Flowlines and Risers, FPSO topsides, and Offloading buoy.
“One of the Nigerian contractors that fabricated the Buoy completed it three months ahead of schedule. The argument often put forward by project promoters is that Nigerian Content is expensive and cannot deliver on schedule. Egina has buried that mindset for forever.” He also underscored the need for new projects to sustain the achievements and employments that were created on the Egina project.
Confirming the anticipated investment in the fabrication industry, chief operating officer of Samsung Heavy Industry, SHI-MCI, Nigeria, Frank Ejizu said the company has invested over $300 million to establish its fabrication and integration yard at Takwa Bay.
Ejizu said the facility which is a state-of-the-art construction platform with world class manpower, was capable of receiving the $3 billion Egina FPSO with capacity of over 10,000 mega tons of fabrication work annually.
He said the company achieved 30 per cent input in the Egina FPSO project by fabricating and installing six modules in the facility but with more deepwater fields coming on stream, more investments will be recorded in that sector so as to achieve 50 per cent local content in that area.
According to him, SHI-MCI FZE a subsidiary of Samsung Heavy Industries Nigeria and the builders of Egina FPSO have reinstated their commitment to invest in Nigeria for the long haul. “It is a huge step forward in shipbuilding and marine, Oil and Gas Industry not only in Nigeria but also in Africa. And the best thing about this is that it is only the start of our long history of successful legacy” he said.
Ejizu, said the Zabazaba and Bonga deepwater projects would open up more investment opportunities in the sector and that SHI-MCI FZE is planning to bid in the project which will mean that more funds will be injected to expand capacity of the fabrication facility soonest.
Nigeria is relying significantly on the 200,000 barrels per day, b/d offshore Egina project to boost its production by over 10 per cent as the Total-operated field is expected to come online later this year.
Nicolas Terraz, managing director, Total Upstream Nigeria, sees the $16 billion deepwater project as the biggest oil and gas investment in Nigeria with the startup expected in Q4 this year. No new big oil fields have started up in Nigeria in nearly five years which is what makes the project pivotal for Nigeria.
“In the operational phase, Egina will add 200,000 b/d to the production of the country, representing about 10 per cent of Nigeria’s current total capacity,” Terraz added.
LEADERSHIP also gathered that the ministry of petroleum resources has started prioritising the approval of oil projects with international oil companies and reviewing the fiscal terms in agreements with foreign partners to develop deepwater oil fields.
The Egina FPSO is a newly built spread moored FPSO with oil and gas processing and water treatment facilities and can store up to 2.3 million barrels of processed oil in its hull, Terraz added. Nigerian crude oil and condensate production has ranged between 1.7 million and 2 million b/d this year, still far below its capacity of 2.2 million b/d as pipeline sabotage in the Niger Delta has persisted.
But production has recovered in the past 12 months after output plummeted to near 30-year lows of 1.1 million b/d in mid-2016 due to renewed militancy in the Niger Delta.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: [email protected]
BUSINESS19 hours ago
JUST IN: CBN, NDIC Revokes Skye Bank’s Licence, Changes Name To Polaris Bank
NEWS19 hours ago
Why PDP Lost In 2015 – Kwankwaso
SPONSORED8 hours ago
How To Last For 25 Minutes Longer In Bed, Permanently End Pain And Embarrassment Of Weak Erection
NEWS19 hours ago
Customs Intercepts 11 Trucks Load Of Smuggled Rice
NEWS13 hours ago
PDP Set To Offer Presidency For Sale, BCO Alleges
NEWS21 hours ago
2019: I’m Set To Give 21st Century Leadership – Tambuwal
CRIME18 hours ago
Caretaker Stab Tenant To Death Over Use of Bathroom In Benin
NEWS21 hours ago
Professor Ejiofor Bags Honorary Citizenship Certificate In U.S.