Total is one of the successful International Oil Companies (IOCs) operating in Nigeria’s oil and gas space for over four decades. The company’s local content drive has boosted Nigerian content interest which is aimed at improving and moving the country’s oil industry forward. The Local content Act which was established in 2010 was a delight to Total and has made assiduous efforts to support the initiative to grow the oil sector in Nigeria using indigenous employees most of whom are trained by the IOC to progress local content and give it a well-deserved face-lift.
Early 2018, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu and the Executive Secretary, Nigerian Content Monitoring and Development Board (NCMDB), Engr. Simbi Wabote visited the Egina Floating, Production, Storage and Offloading (FPSO) on LADOL Island. After a tour of the unit, Engr. Wabote threw a challenge at the industry by announcing that Total with Egina Project has set the bar for others and the next target.
Therefore, the next line of action is to stretch the limit to get more for Nigeria. Total aspiration is that for the next seven to eight years, full integration of an FPSO will come to existence in Nigeria.
This offers a clear hint as to which direction the Nigerian Oil and Gas industry should be. On Egina, six out of eighteen topside modules of the FPSO were fabricated in Nigeria, lifted in Nigeria and fully integrated in the country. Assembly of the integrated control and safety system of the FPSO will be fully performed in-country. If this pace is sustained for the next eight years with the right policies and investor-friendly legislation, local content will move to the next level. With several large deep-water discoveries still to be developed, such as Bonga South West of Owowo, all the yards have been involved in the development of the Egina project need activity to maintain their infrastructure and the improved competency levels of their human capital.
Besides, both government and industry have a critical role to play so as to project local content forward. In the past three years, to keep the industry alive, all the operators have been focusing on reducing the cost of new deep-water projects in order to make sure that they can sanction projects and bring value at $50 per barrel. While the operators are all trying to tighten their belt in line with the realities of the times, it is important that operators put in place sustainable Production Sharing Contract (PSC) and gas terms as this is a fundamental requirement for continued investment in Nigeria’s deep offshore.
Notwithstanding, the development of new projects is critical to maintaining industry capabilities. As the industry moves even further offshore, the need for this know-how cannot be over-emphasized and Nigeria must move up to a level where it is able to meet the competency needs of other new entrants within the Africa sub-region and be considered as a technological hub for the region.
Nigerian content in the Nigerian Oil and Gas industry, through careful legislation and government policies could also have great impact in other sectors of the economy such as: information and communication technology with telecommunication. There is impact on agriculture, engineering and construction. Also, manufacturing, transport, storage, power and finance have been impacted.
Hence, the next frontier is very broad and filled with opportunities but is it is lined with a lot of challenges that are surmountable. The government and operators should take bold steps and decisions that are required to move into the next phase.