Minister of Petroleum, Dizeani Allison Madueke
Chika Amanze-Nwachuku writes that the recent award of N22 billion contract to Seawolf Oilfields, a wholly Nigerian company for the supply of a jack-up rig by United States oil major, ExxonMobil is indicative of the rapidly rising capacity of indigenous drilling companies in the offshore oil business, an arena dominated by foreign companies.
Perhaps, one of the remarkable achievements recorded by President Goodluck Jonathan within his first 100 days in office was the signing into law of the Nigerian Oil and Gas Industry Content Development Bill (2010) on April 22, 2010.
The Nigerian Content development had been initiated by the administration of former President, Chief Olusegun Obasanjo, to help develop local capacity building in the Nigerian oil and gas sector. Prior to the enactment of the Act, Nigerian content in the oil and gas industry was estimated at around five percent, indicating that most white-collar jobs were provided by foreigners.
Between 1980 and early 2010, the Nigerian oil and gas industry was said to have imported goods and services worth over $300 billion from foreign economies, with little or no patronage of local companies.
So, the signing of the Nigerian content law has not only given the needed teeth to the federal government’s aspiration to increase local participation in the oil and gas sector, but has automatically transformed the industry from a major importer of goods and services to an industry that sources a substantial proportion of its inputs locally, thereby empowering Nigerians.
Executive Secretary of the Nigerian Content Development and Monitoring Board(NCDMB), Mr. Ernest Nwapa, disclosed recently that an estimated $2.8 billion worth of investment has been attracted into the economy in the last two and half years as a result of the enactment and implementation of the NOGIC Act.
Nwapa said apart from cutting down on hundreds of construction and fabrication jobs taken outside the country for execution by multinational oil companies, the industry operators are now becoming fully conscious of implications of not including Nigerian content in whatever project designed and execution they have earmarked for the industry.
The Act provides among others, that Nigerian independent operators should be given first consideration in the award of oil blocks; oil field licenses; oil lifting licenses and in all projects for which contract is to be awarded in the Nigerian oil and gas Industry. It also grants exclusive consideration in traditional areas to indigenous service providers that can demonstrate ownership of equipment, Nigerian personnel base and capacity to work area.
In fulfilment of the objectives of the NOGIC Act, foremost indigenous offshore drilling company, Seawolf Oilfields recently signed a N22 billion contract for the supply of a jack-up rig with United States oil major, ExxonMobil.
Under the deal, Seawolf will supply its premium jack-up, christened ‘JU Oritsetimeyin’, to ExxonMobil for a firm two year term, commencing third quarter of 2013.
The 300-feet independent cantilever jack-up rig, JU Oritsetimeyin, which had drilled six oil wells for Total Exploration, will commence work with ExxonMobil in the third quarter of next year, following a refit to meet ExxonMobil's safety, environment and operational requirements. Currently, Seawolf has three rigs- JU Oritsetimeyin; JU Onome and JU Delta Queen. The Delta Queen, which was contracted by Norwegian Mosvold Jack-up in 2006 is currently signed to Conoil Producing, while Seawolf Onome, the first Nigerian-owned rig to ever operate in Nigeria waters is contracted to Addax Petroleum.
JU Onome had successfully drilled and completed three horizontal production wells for Addax. Managing Director of Addax Petroleum, Mr. Xinmin (Phillip) Wu, had during the celebration of a milestone attained by the company, noted that the landmark achievements of the drilling rig was a boost to the federal government’s quest for more indigenous participation in the oil and gas industry.
“We are celebrating today, because Addax Petroleum has worked jointly with the owners and operators of the indigenously owned jack-up drilling rig, Seawolf Onome, in the last one and a half years, and especially in the last 10 months, to fulfill part of the national aspiration of having Nigerians meaningfully partake in the oil and gas business in the country,” the Addax Chief had commented then.
Over the past five years, Seawolf, with the backing of its Partners, FBN Capital Partners Limited, Pan African Infrastructure Development Fund, Leadway Assurance and Haskal Holdings has pursued an active drilling programme for Total Exploration, Addax Petroleum and Conoil Producing, each of which, like ExxonMobil, had thrown their full financial and operational muscle behind this first of its kind Nigerian enterprise.
The company said the signing of the contract was a significant restatement of ExxonMobil's high level support of the Nigerian government's policy of enhancing indigenous content in the Nigerian oil and gas business as well as its continuing commitment to support indigenous companies with demonstrable capacity to operate and endure high specification, capital intensive and operationally challenging sectors of the offshore oil business.
“As the world's single largest publicly traded international oil and gas company, with the most reputable and regarded record of safety, environmental responsibility and operational integrity, there can be no better support of an initiative that relies almost entirely on the support and goodwill of the international oil companies that operate Nigeria's most significant assets. ExxonMobil has, with this measure again proven its commitment to the local content initiative and there are few more worthy contractors to enjoy this support”, Seawolf said.
The indigenous offshore drilling company and its sponsors, over the past five years weathered the downturn in the global economy, the collapse and rebound of crude prices and the concomitant impact on drilling day rates, and survived a myriad of challenges in its bid to deliver world class drilling services to its clients.
Industry analysts said the signing with ExxonMobil is testament to how far indigenous players have come in the ownership and operation of offshore oilfield assets, and in earning the trust, confidence and support of the world's most substantial oil and gas companies. The development, they noted, was indeed an indication of a rapidly rising capacity of indigenous drilling companies in the arena that had long been dominated by foreign firms.