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Local Content: LEE Engineering Joins the Fray of Operators in Oil Sector

07 Apr 2013

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Dizeani Allison Madueke

By Omon-Julius Onabu

Nigeria  today is no doubt engrossed in the effort to transform the country’s economy in various facets. However, one striking feature of the transformation process relates to the insistence by the Federal Government that multinational operators in the oil and gas industry adhere strictly to the guidelines on the Nigerian content policy. There seems to be a general agreement among industry watchers that what makes the Nigerian Content Act particularly auspicious is the fact that it has streamlined the pattern that policies and activities in the oil and gas sector of the economy should take. The Act, which was duly signed on April 22, 2010 by President Goodluck Jonathan as the Nigerian Oil and Gas Industry Development Act 2010, has been widely acclaimed for opening the doors for more active participation of Nigerian entrepreneurs even in the downstream sector of the industry.

There is no doubt that LEE Engineering Company has continued to play a key role,even among globally acknowledged operators in the downstream sector of the Nigerian industry. In recent past, LEE Engineering Company had witnessed two landmark events that definitely signpost its consolidation on years of concerted efforts to make an eloquent statement for greater indigenous involvement in the mainstream of the oil and gas industry in Nigeria , especially in the upstream sector.

Some time last year, the company signed a performance enhancement agreement with Shell Petroleum Development Company (SPDC) Nigeria Joint Venture. The Managing Director/Chief Executive Officer of LEE Engineering and Construction Company, Chief Leemon Ikpea, and the Managing Director/Chairman of SPDC, Mr. Mutiu Sunmonu signed the landmark agreement on behalf of their respective companies. “Our focus is on helping to increase the capacity of Nigerians and Nigerian companies in a range of oil and gas industry activities; from design and engineering, to exploration and drilling,” Sunmonu said on SPDC’s commitment to collaboration with the Federal Government towards ensuring increased indigenous participation in the oil and gas industry.

The Group Managing Director (GMD) Nigerian National Petroleum Corporation (NNPC), Mr Andy Yakubu witnessed the signing of the contract at Utorogu Gas Plant in Ughelli South Local Government Area of Delta State.

The Utorogu gas facility, which is easily the nation’s most comprehensive gas exploration and production system, is currently involved in a huge expansion project – tagged NAG2 Plant – expected to add some 150 million metric standard cubic feet per day (MMscf/d) to the plant’s output. The old Utorogu plant, which was inaugurated on January 17, 1986, has an average capacity of 250 MMscf/d of gas; and, is the main base of the West Africa Gas Project (WAGP).

The performance improvement works of Utorogu Gas Plant (NAG1) is being undertaken by LEE Engineering. Against this background, coupled with the minister’s virtual vote of confidence on the pace-setting performance of the company on several past and ongoing projects across the country, THISDAY spoke with the company’s helmsman in Warri on these landmarks including the performance improvement contract the company signed with the SPDC. Ikpea said that his company’s management felt highly motivated because it was a demonstration of SPDC’s implicit confidence in the competence of LEE Engineering Company. According to Ikpea, the company considers the Performance Improvement Contract as interesting and important although it was based on its “track record of performance at the highest level of international best practices.”

“The NNPC and its subsidiaries and SPDC are our major clients; and, we have successfully executed numerous projects for them over the years. For instance, LEE Engineering executed several EPCM projects, including the recently commissioned WAGP (West African Gas Pipeline) Gas Supply Project for SPDC in which the company celebrated the achievement of over 1,000,000 LTI Free Man-hours”, the LEE Engineering boss said. “Well, our corporate objectives drive all our operations. We are committed to being a leading indigenous company with vast experience in EPC works, which we strive towards though modest provision of excellent services to the oil and gas sectors and other sectors with highest professional and safety standards available.”

The second major event saw the official commissioning of the company’s ultra-modern office complex in Ekpan-Warri, the commercial nerve-centre of Delta State . The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke performed the traditional tape-cutting ceremony to formally open the magnificent edifice.

LEE Engineering’s chief executive spoke to THISDAY on the significance of the building of the office complex in the heart of the oil-rich Niger-Delta of Nigeria vis-à-vis Nigeria’s indigenisation or ‘local content’ policy thus: “The establishment of LEE Engineering Complex in Ekpan symbolises our determination and avowed commitment to excellence and readiness to pursue the national aspirations of the Federal Republic of Nigeria in the enactment of the Nigerian Content Act, which was signed into law by the President, His Excellency, Dr. Goodluck Ebele Jonathan, in line with the current administration’s transformation agenda.”

In the same vein, Ikpea acknowledged the consistent support of Nigeria ’s oil minister, Mrs. Allison-Madueke, commending her for consistently encouraging indigenous players in the oil and gas industry in the country. “The Honourable Minister has remained a resourceful leader”, Ikpea noted, adding, “She has always championed the cause of local participants, patronage and growth in the oil and gas industry. I believe the onus rests with us as indigenous players in the oil and gas industry to encourage the honourable minister through commitment to internationally accepted professional standards in our operations.”

It is noteworthy that the minister’s passion for consolidating the gains of the Nigerian content in the sector rang through her remarks at the commissioning event in Warri. Her concern apparently stemmed from the current energy challenges in the country. She emphasized the federal government’s commitment to the expansion of Nigeria’s gas-to-power capacity, saying the ministry’s weeklong tour of all gas installations and projects programmed for the production of additional gas was a critical task under the Gas Supply Emergency Programme of her ministry; which she said was “geared towards eliminating bottlenecks in the drive to ensure adequate gas supply for power needs of the country.” The project-by-project inspection involving new gas plants as well as expansion of existing plants and new pipeline infrastructure project was complemented by a roundtable held in Lagos . The roundtable focused on critical areas as captured in its theme, namely “Crude Oil Production and the State of the Oil Industry in Nigeria”.

However, Alison-Madueke expressed satisfaction with efforts of Nigerian entrepreneurs and professionals to key effectively into the window of opportunities opened in the upstream sector of the oil and gas industry by the Nigerian Local Content Act. The efforts of the managing director of LEE Engineering and Construction Company, Ikpea has been particularly outstanding in this regard, she noted, saying she was delighted that internationally acknowledged expertise in the sector was being somewhat domesticated for the benefit of future generations of Nigerians through the activities of LEE Engineering and several others. This has opened a new vista for creating a bright future for the industry with prospects for creating numerous jobs especially for Nigerian youths, she observed.

Nonetheless, THISDAY learnt that it had been a fairly long and onerous march to prominence in the industry for Ikpea and LEE Engineering. The consistent pursuit of the objectives and ideals of the organisation led to the commissioning of LEE Engineering’s overseas offices in London (United Kingdom) and Italy in 2000 and 2010, respectively; quite significantly, in tandem with Nigeria’s international collaboration policy about the local content law.

The commissioning of the ultra-modern office complex in Warri, Delta State ’s commercial nerve-centre, could therefore be regarded as an icing on an obviously luscious cake of achievement. Ikpea modestly reiterated that these remarkable achievements remained a function of the diligent pursuit of the corporate aspiration of his company, namely, “To be the preferred Nigerian indigenous oil, gas and power engineering services provider, committed to excellence and maintaining international quality standards in all aspects of its job delivery process.”

Needless to say, the anchorage for increased local participation in the sector was indeed guaranteed by the Nigerian Content Act, which was signed into law by President Goodluck Jonathan on April 22, 2010, and has been given due incentive via the Nigerian Content Development and Management Board (NCDMB). It is noteworthy that the Executive Secretary of the NCDMB, Mr. Ernest Nwapa was among the crème la crème of the industry as well as traditional and religious leaders especially from Edo and Delta states that witnessed the aforementioned ceremonies.

“The Korean companies have done a lot of jobs in Nigeria but some of them had operated from a single hotel room yet getting contracts worth $2bn (two billion dollars). They go back home, do it and float it back to Nigeria and return yet again in another hotel room for more deals. I can tell you none of them is endowed with the consequences of that kind of approach.

“Jobs we needed more than anybody else were being exported. It is estimated that the capital flight that took place in the last 30 years before the law was put at 350 billion! And, if it were just the jobs being taken out, we’d say Okay we can get jobs elsewhere, but taking work outside the country meant that we were taking out the opportunities for Nigerians to learn from the country. We were taking opportunities of investors to put facilities in Nigeria out of the country; because if you don’t care about doing work in your country, nobody will really care about building facilities in that country to work for you.”

Nwapa therefore warned, “If we do not take the Nigerian content seriously, we will find that the benefits after investing in gas will still be shipped abroad.”

Tags: Business, Nigeria, Featured, Local Content

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