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Nigeria plans 50 per cent domiciliation of integration of FPSO


Minister of State for Petroleum Resources, Dr. Ibe Kachikwu (left); Country Chair, Shell Companies in Nigeria and Managing Director of The Shell Petroleum Development Company of Nigeria Limited (SPDC), Osagie Okunbor; and the Managing Director, Shell Nigeria Exploration and Production Company, Bayo Ojulari, during the presentation of The Best International Company in Technology and Innovation to Shell at the 2018 Nigeria International Petroleum Summit held in Abuja… on Monday.

Nigerian Content Development and Monitoring Board (NCDMB), and major operating companies have embarked on plans that would ensure the full domiciliation of Floating Production Storage Offloading (FPSOs) vessels in Nigeria.

According to the Executive Secretary, NCDMB, Simbi Wabote, 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 projects have been planned to domicile 50 per cent of the fabrication of modules and integration of the FPSOs.

He emphasized the need for the Nigerian oil and gas industry to strive to develop local capacities to execute full fabrication and integration of FPSOs in-country within the next eight years.

He spoke recently in Lagos, when he accompanied the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, and other top officials of the industry to inspect the Total E&P Egina FPSO docked at the Samsung Heavy Industry (SHI-MCI) Yard, LADOL Free Zone.

Wabote commended Total E&P for setting high Nigerian Content benchmarks with the Egina project in the areas of engineering, fabrication, testing, coating, and integration, stressing that the challenge for forthcoming projects would be 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 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’.”

The NCDMB boss also affirmed that the Egina project has changed the narrative about the capacities and capabilities of oil servicing companies in Nigeria.

“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 enthused.

He also underscored the need for new projects to sustain the achievements and employments that were created on the Egina project.

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, commended Total for the feat, noting that local capacities deployed to fabricate the Egina FPSO were sufficient to solve the nation’s electricity challenges, refine petroleum products to meet the needs of the populace, build durable roads, and address other infrastructural deficiencies.

Kachikwu charged project promoters in all spheres of the energy sector to fast-track their projects, noting that the Federal Government was in a hurry to industrialise the nation, and increase the volume of crude oil production at competitive costs.

In view of the oil prices which currently hover within the range of $60 per barrel, the Minister informed that Government will soon prioritise oil production from fields that bring more returns to the nation against others that operate with high production costs.

Also speaking, the Managing Director, LADOL, Dr. Amy Jadesimi, highlighted the key roles played by the Board on the Egina project. She said: “the feat would not have been possible if NCDMB had not insisted, and if Total had not taken a huge risk when nobody thought it was possible to support us. I also want to thank NCDMB for providing us the financial support.”

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