Minister of Petroleum, Mrs. Diezani Alison-Madueke
By Ejiofor Alike
Minister of Petroleum, Mrs. Diezani Alison-Madueke, has directed the Nigerian Content Development and Monitoring Board (NCDMB) to work with oil companies operating in the country to evaluate existing machine shops, dock yards, fabrication yards and other facilities, which could be upgraded to meet the oil industry specifications.
Worried that many existing facilities were under-utilised and could be harnessed at reduced costs to support industry operations locally, the minister further instructed that recommendations from the evaluation should get to her office before July this year.
She also stated that there was an increasing interest of original equipment manufacturers and investors to set up facilities in Nigeria.
She noted that while the market share of indigenous vessel owners had risen from less than $200 million in 2009 to $1 billion, locally fabrication tonnage had also risen by 40 per cent to 54,000 metric tonnes per annum over the same period.
Confirming this development in a statement yesterday, the Public Affairs Officer of NCDMB, Mr. Obinna Ezeobi, stated that the minister gave this directive when she led chief executives of international oil companies on a facility visit to SCC Pipe mill in Abuja, as part of the series of planned physical assessments of key local content facilities across the country.
She commended the model used at SCC pipe mill whereby the facilities set up originally to manufacture water supply pipes were upgraded to service the oil and gas Industry.
SCC first manufactured pipes for ExxonMobil which were installed in the company’s Edop facility offshore in 2011, thereafter, opened the flood gates for current orders from Shell, Chevron and Agip.
Madueke also explained that the cumulative orders from the operators had not only ensured that the company retained about 350 Nigerian workers, but also had the potential to grow the workforce to 500 with projected work flow from the industry.
The minister stated that on-going establishment of longitudinal submerge-arc welded pipe mill in Yenagoa by Yulong Steel and planned longitudinally welded steel mill in Abeokuta by Vigeo Steel would create over 10,000 direct and ancillary jobs and retain $700 million in the Nigerian economy.
“The projects will also create 3,000 training opportunities as well as other benefits to the Nigerian economy when completed by 2014,” he said.
She further explained that many other investors have also expressed interests to establish pipe mills in Nigeria and their efforts must be supported by government.
“Our role as government is to create the conditions that will stimulate these investors. Investments in a few more pipe mills will increase capacity and create local competition which will surely improve quality, operational efficiency and drive costs down in the medium to long term,” she said.
She assured that the establishment of steel pipe mills in Nigeria is a viable venture given that the oil and gas industry demand is envisaged to grow to over a million metric tonnes per annum to serve the upcoming field developments, Gas Master plan and Gas Revolution projects.
“There will also be replacement of aging pipelines, brown field modifications, construction of new refineries and petrochemical plants which would require steel pipes,” she added.
She reiterated the commitment of President Goodluck Jonathan to the full implementation of the Nigerian Content Act and support for companies that invest in the establishment of targeted facilities where the Nigerian Content scope can be performed satisfactorily.
She added that provisions of the Nigerian Content Act protect investments in facilities and disallow the industry from exporting work that can be done in-country, stressing that local facilities must be accorded first consideration in line with the principles of the Act.
The minister also disclosed that the industry had recorded positive results from the intervention of the Nigerian Content Development and Monitoring Board.