Government may stop offshore oil facilities

The integration of the next floating production storage and offloading (FPSO) facility for upcoming offshore field development project would be done in-country, Minister of Petroleum Resources, Diezani Alison-Madueke has said.

Mrs. Alison-Madueke, who was speaking at the weekend at the official commissioning of the Abang and Itut Satellite Field Development Project platforms designed and fabricated at Nigerdock Island Integrated Free Zone for Mobil Producing Nigeria (MPN), said the implementation of the Nigerian content policy in the oil industry has helped Nigerians develop the required technical capacity for it.

The minister recalled that for several decades, the country celebrated the commissioning of similar platforms in dockyards located in Asia, Europe and the Americas where the industry traditionally procured FPSO units, offshore platforms, line pipes, marine vessels, liquefied natural gas (LNG) tankers, drilling rigs, power plants and other equipment packages servicing the oil and gas industry.

 “The result has always been that while revenue from oil production activities has been impressive, there was no employment growth and little impact on our gross domestic products (GDP) from industry activities,” she noted.

“By fabricating platforms and similar structures locally, Nigerdock’s facility would support a workforce of over 1,000, provide practical training and employment opportunities for hundreds of engineers and welders as well as attract international technical partnerships and investments for upgrade of plant and infrastructure.”

Already, she said,  Nigerdock and other Nigerian yards have successfully handled the fabrication of structures like FPSO topsides, offshore platforms, buoys, subsea trees and pressure vessels, pointing out that this has strengthened government’s resolve to ensure that the next FPSO topside integration would be executed in a Nigerian Yard in compliance with the provisions of the Nigerian Content Act.

Mrs. Alison-Madueke said the Nigerian Content Development and Monitoring Board (NCDMB) implementation model had resulted in successful collaborations between the Nigerian National Petroleum Corporation (NNPC), the international oil companies (IOCs), equipment manufacturers and local service companies.

She said the implementation of the NC Act had stimulated steady growth and impact in the areas of engineering, procurement, construction, fabrication, installation, shipping and logistics, drilling and subsurface, equipment component manufacturing, pipe mills, instrumentation controls, banking and insurance.

“With the Federal Government plan to achieve final investment decisions (FIDs) for new projects over estimated to cost about $150billion in the next 5 years, we are making progress to ensure that there will be enough yards, facilities, institutional knowledge and trained manpower to execute a high proportion of the works in Nigeria to international standards of quality and safety,” she said.

President Goodluck Jonathan, who performed the commissioning of the facility, said Nigerians and the country’s economy could only derive maximum benefits from the oil and gas Industry if the NC Act is faithfully implemented.

 According to the president, merely earning money from the sale of crude oil to pay salaries and build infrastructure is not helping the economy in the desired way, pointing out that until the country ensures that the requirements of the industry are produced in-country, Nigeria could hardly derive any benefit from the industry.

 “Our gross national earning from the sector is more than 80 per cent, so it is from the oil sector that we can industrialise,” the president said. “By developing capacities locally and owning assets used in industry operations, the sector can increase employment opportunities, produce and utilize more locally manufactured goods and components.”

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He blamed the inability of the country to realize its target of 70 per cent local content in the industry by 2010 on limited capacity among Nigerians, adding that the accomplishment by Nigerdock would spur capacity building by other companies.

“The completion of the Satellite Fields Development Platforms is the first to be achieved locally,” he said. “This is a proof that Nigerian Content Act was already yielding the expected transformational results. This is a demonstration of the rightness of the local content law. When you consider that oil and gas sector accounts for over 80 percent of the country’s income then you will appreciate the importance of what the law can do to transform our economy.”