Oil & Energy

Egina, Pushing Nigerian Content Frontier

Published

7 years ago

July 16, 2018

This is the concluding part of a keynote address by the Deputy Managing Director, Deep Water, Total Upstream Companies in Nigeria, Mr. Ahmadu-Kida Musa, at the Nigeria Oil And Gas Conference and Exhibition (NOG) 2018, held at ICC, Abuja, July 2, 2018
Egina Project It was against the back drop of this new approach to Nigerian Content that Total took the Final Investment Decision to develop Egina in 2013, three years after the Nigerian Oil & Gas Industry Content Development Act became law. The result is that Egina became a test case for the NOGICD Act.
Egina is the latest of Total’s deep-water developments and the third project of its kind developed by Total in Nigeria, after Akpo and Usan. These projects have brought progressive increase in levels of Nigerian Content and this is well illustrated by the percentage of total project workload performed in Nigeria: from 44% for Usan, Total recorded 60% for Akpo and now 77% will be achieved for Egina just before the FPSO sails away from the SHI-MCI Yard in LADOL Island, Lagos where it is currently moored for topsides integration works.
In the coming weeks, the FPSO will sail away to Egina field, which is located in OML130, approximately 150 kilometres offshore Port Harcourt. It is the deepest offshore development carried out so far in Nigeria, in water depths of over 1,500 meters and the project is designed to produce 200,000 barrels per day of oil at plateau. In addition to the oil, the Egina field will produce gas.
Associated gas will be partly re-injected into the reservoir to maintain reservoir pressure and partly channelled to supply the domestic gas market.
Nigeria is proud that Egina has advanced Nigerian Content to new levels in many domains and I’ll mention a few of them.
Firstly, Project management: For Egina, all the Project Management teams, for both Total and the main EPC Contractors, have been based in Lagos – a first for a Nigerian FPSO project. The location of these teams in Nigeria to carry out engineering and procurement activities has generated significant employment opportunities at various skill levels ranging from office administrative staff to top level engineers and managers.
The Detailed Engineering of the Egina FPSO Topsides was executed in-country by Samsung with a consortium of Nigerian engineering companies (NETCO, DeltaAfrik and IESL), employing about 250 Nigerian engineers. Similarly, the Detailed Engineering for all the other work packages was executed in Nigeria, in association with local engineering companies like DeltaTek and Crestech.
Egina also created employment in Nigeria during the construction phase. It generated 24 direct million man-hours (77% of total project workload), which is over 3,000 persons on average during five years.
Significant training hours were also recorded on the project. The objective set with NCDMB was to train 200 engineers and technicians and Egina surpassed these targets recording over 560, 000 man-hours of human capacity development training across Egina contracts.
The project led the development of Infrastructure. A new fabrication and Integration yard has been built and it is Africa’s first FPSO integration quay. It was constructed under the FPSO package contract by SHI-MCI, within Lagos Deep Offshore Logistics Base on LADOL Island.
Today, the Egina project is proudly the first to record the fabrication and integration of FPSO topsides in Nigeria. Six of the 18 topside modules were fabricated and integrated at the SHI-MCI facility at LADOL. The Egina FPSO arrived from Korea in the last week of January for the integration of the locally fabricated modules and this integration was successfully completed in May without incident.
In addition to the new SHI-MCI integration quay,several existing yards and manufacturing sites in other parts of Nigeria were upgraded for the fabrication of various components of the Egina project in Port-Harcourt, Onne and Lagos.
Subsea Production Manifold Fabrication in Nigeria. Six numbers complex 263 metric tonnes production manifolds having six slots were done in AVEON yard.
Xmas Trees Assembly and Testing at TFMCOnne yard. For the first time, all Xmas trees were fully assembled and tested in Nigeria for a deep offshore project of this magnitude.
Buoy Fabrication and Launching. The Egina Loading buoy was fabricated in Port-Harcourt in the same yard as the Manifolds.
Overall, an impressive 60,000 tons of equipment were fabricated in Nigeria and this represents 35% of fabrication for the entire project.
This leads me to the last and final part of my address.
The Next Frontier
On Tuesday, February 13, 2018, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu and the Executive Secretary, Nigerian Content Monitoring & Development Board, Engr. SimbiWabote visited the Egina 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 “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.”
This remark offers a very clear ‘hint’ as to which direction the Nigerian Oil & Gas Industry should be looking as we move past Egina. On Egina, six out of the 18 topside modules of the FPSO were fabricated in Nigeria, lifted in Nigeria and fully integrated in Nigeria.
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 and with the right policies and investor-friendly legislation, I don’t see why the prophecy of the Executive Secretary wouldn’t come true!
With several large deep-water discoveries still to be developed, such as Bonga South West or Owowo, we know that the resources are there. All the yards that 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.
Both government and the Industry have a critical role to play here. 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 we put in place sustainable PSC and Gas terms as this is a fundamental requirement for continued investment in Nigeria’s deep offshore. And the development of new projects is critical to maintaining industry capacities.
As the industry moves even further offshore, the need for this know-how cannot be over-emphasised. 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 & Gas Industry, through careful legislation and government policies could also have great impact in other sectors of the economy, including: information & communication technology/telecommunication agriculture, engineering and construction, manufacturing, transport and storage, power and finance, etc.
The next frontier is very broad and filled with opportunities. But it is also lined with a lot of challenges that Total believe are surmountable. Let’s take the bold steps and decisions that we all require to move into the next phase.
Again, a slogan we have always used, “Its always impossible until it is made possible”. Nigerian Content (NC) is possible.

Oil & Energy

No Subsidy In Oil, Gas Sector — NMDPRA

Published

1 week ago

September 8, 2025

The Tide

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said there are no subsidies in the oil and gas sector as Nigeria operates a completely deregulated market.

The Director, Public Affairs Department, NMDPRA, George Ene-Italy, made this known in an interview with newsmen, in Abuja, at the Weekend.

Reacting to the recent reports that the Federal Government has removed subsidies or increased the price of Compressed Natural Gas (CBG), Ene-Italy said, “What we have is a baseline price for our gas resources, including CNG as dictated by the Petroleum Industry Act”.

He insisted that as long as the prevailing CNG market price conforms to the baseline, then the pricing is legitimate.

Furthermore, the Presidential – Compressed Natural Gas Initiative (P-CNGI) had said that no directive or policy had been issued by the Federal Government to alter CNG pump prices.

The P-CNGI boss, Michael Oluwagbemi, emphasised that the recent pump price adjustments announced by certain operators were purely private-sector decisions and not the outcome of any government directive or policy.

For absolute clarity, it said that while pricing matters fell under the purview of the appropriate regulatory agencies, no directive or policy had been issued by the Federal Government to alter CNG pump prices.

The P-CNGI said its mandate, as directed by President Bola Tinubu, was to catalyse the development of the CNG mobility market and ensure the adoption of a cheaper, cleaner, and more sustainable alternative fuel and diesel nationwide.

Oil & Energy

‘Nigeria’s GDP’ll Hit $357bn, If Power Supply Gets To 8,000MW’

Published

1 week ago

September 8, 2025

The Tide

The Managing Director, Financial Derivatives Company Limited (FDC), Bismarck Rewane, has said that Nigeria’s Gross Domestic Product (GDP) could rise to $357b if electricity supply would increase from the present 4.500MW to 8,000MW.

Rewane also noted that Nigeria has spent not less than $30 billion in the power sector in 26 years only to increase the country’s power generation by mere 500MW, from 4,500 MW in 1999 to 5,000MW in 2025 though the sector has installed capacity to generate 13,000 MW.

In his presentation at the Lagos Business School (LBS) Executive Breakfast Session, titled “Nigeria Bailout or Lights Out: The Power Sector in a Free Fall”, Rewane insisted that the way out for the power sector that has N4.3 trillion indebtedness to banks would be either a bailout or lights out for Nigeria with its attendant consequences.

He said, “According to the World Bank, a 1.0 per cent increase in electricity consumption is associated with a 0.5 to 0.6 per cent rise in GDP.

“If power supply rises to 8000MW, from current 4500MW, the bailout shifts money from government into investment, raising consumption and productivity. And, due to multiplier effects, GDP could rise to $357 billion.”

The FDC’s Chief Executive said “in the last 30 years, Nigeria has invested not less than $30 billon to solve an intractable power supply problem.

“The initiatives, which started in 1999 when the power generated from the grid was as low as 4,500MW, have proved to be a failure at best.

“Twenty-six years later, and after five presidential administrations, the country is still generating 5,000MW. Nigeria is ranked as being in the lowest percentile of electricity per capita in the world.

“The way out is a bailout, or it is lights out for Nigeria”, he warned.

He traced the origin of the huge debts of the power sector to its privatisation under President Goodluck Jonathan’s administration, when many of the investors thought they had hit a jackpot, only to find out to their consternation that they had bought a poisoned chalice.

Rewane, who defined a bailout as “injection of money into a business or institution that would otherwise face an imminent collapse”, noted that the bailout may be injected as loans, subsidies, guarantees or equity for the purpose of stabilising markets, protect jobs and restore confidence.

He said, “The President has promised to consider a financial bailout for the Gencos and Discos. With a total indebtedness of N4.3 trillion to the banking system, the debt has shackled growth in the sector.”

Rewane warned that without implementing the bailouts for the power sector, the GENCOs and DISCOs would shut down at the risk of nationwide blackout.

Rewane, however, noted that implementing a bailout for the power sector could have a positive effect on the country’s economy if Nigeria’s actual power generation could rise from today’s 4,500 MW to around 8,000 and 10,000 MW.

The immediate gains, according to him, would include improved power generation and distribution capacity, more reliable electricity supply to homes and businesses as well as cost reflective tariffs.

Oil & Energy

NEITI Blames Oil, Gas Sector Theft On Mass Layoff

Published

1 week ago

September 8, 2025

The Tide

The Nigeria Extractive Industries Transparency Initiative (NEITI) has blamed the increasing crude oil theft across the nation on the persistent layoff of skilled workers in the oil and gas sector.

The Executive Secretary, NEITI, Orji Ogbonnaya Orji, stated this during an interview with newsmen in Abuja.

Orji said from investigations, many of the retrenched workers, who possess rare technical skills in pipeline management and welding, often turn to illicit networks that steal crude from pipelines and offshore facilities.

In his words, “You can’t steal oil without skill. The pipelines are sometimes deep underwater. Nigerians trained in welding and pipeline management get laid off, and when they are jobless, they become available to those who want to steal crude”.

He explained that oil theft requires extraordinary expertise and is not the work of “ordinary people in the creeks”, stressing that most of those involved were once trained by the same industry they now undermine.

According to him, many retrenched workers have formed consortia and offer their services to oil thieves, further complicating efforts to secure production facilities.

“This is why we told the Nigerian Content Development and Monitoring Board (NCDMB) to take this seriously. The laying off of skilled labour in oil and gas must stop”, he added.

While noting that oil theft has reduced in recent times due to tighter security coordination, Orji warned, however, that the failure to address its root causes, including unemployment among technically trained oil workers would continue to expose the country to losses.

According to him, between 2021 and 2023, Nigeria lost 687.65 million barrels of crude to theft, according to NEITI’s latest report. Orji said though theft dropped by 73 per cent in 2023, with 7.6 million barrels stolen compared to 36.6 million barrels in 2022, the figure still translates to billions of dollars in lost revenues.

Orji emphasised that beyond revenue, crude oil theft also undermines national security, as proceeds are used to finance terrorism and money laundering.

“It’s more expensive to keep losing crude than to build the kind of monitoring infrastructure Saudi Arabia has. Nigeria has what it takes to do the same”, he stated.