The Managing Director, Lagos Deep Offshore Logistics base (LADOL), Amy Jadesimi, has called for more collaboration among Nigerian operators as a way of moving the nation’s maritime, oil and gas sectors forward.
Jadesimi made the call while speaking on “Driving Economic Growth through Indigenous Private Sector Investment in Nigeria,” at the week-long annual Offshore Technology Conference (OTC), which ended last week in Houston, United States of America.
She expressed optimism about the future of the local industries particularly in Nigeria, saying for the industries to optimise their potential, there are hurdles that must be overcome.
The hurdles, according to her, are the long contracting cycle, the foreign controlled private monopoly strangling the industry and the need for greater collaboration amongst Nigerians, in the public and private sector to create the hundreds of thousands of jobs that will be generated.
In order to overcome the hurdles, she urged indigenous private sector companies who have invested in the industry, and the government to work together towards the realisation of this objective.
She noted that going forward, the industry requires a huge private investment of about $20 billion per year of private money just to maintain status quo and an additional $15 to $20 billion to grow the market.
“This means Nigeria has to become more competitive, we have to become the hub and premier investment destination for the oil and gas sector in West Africa. Altogether the industry is targeting production levels of three million barrels of oil and 10 million scf of gas per day. Fortunately, the fundamentals of the Nigeria petroleum sector are very strong, with many acreages being self-funding, when in production with strong operational and cost controls in place. With this huge market potential and strong fundamentals, Nigeria should naturally be the most attractive oil and gas investment destination in the world,” she said.
The LADOL boss further pointed out that beyond these potential that abound in the country, “governance and macroeconomic factors are also in Nigeria’s favour. From an investment perspective, our current government and the low oil price have created a perfect window of opportunity at precisely the right moment in the life of our industry.”
Although she commended government for announcing a reduction in the tender cycle to six months, she said it was still far too long in comparison to our neighbouring countries.
“And to reassure investors that six months is achievable, we would like to see concrete and detailed plans on how six months, or even less, can be achieved” she said
According to Jadesimi, cost reduction is another vital area that must be addressed. She noted that the industry had maintained an expensive foreign controlled monopoly in the provision of oil and gas logistics in the past “that literally kill our chances of growing the market and attracting new investors.
“In 2007 when the oil price first began to rise NNPC and NAPIMS insisted that all logistics had to be done from Onne at prices that were the most expensive in the world. As a direct result of this, Nigeria lost billions in investment to neighbouring countries and exploration grounded to a halt. Now, in this new era of real local content and with the absolute need to attract tens of billions in private investment, we are urging all stakeholders to come together and collaborate to grow the market. This will naturally create more work and good returns for all participants, both old and new” she said.
She revealed operators that carry out their services at LADOL have halved their offshore drilling and production costs, sending a message to global market that Nigeria is an attractive location from which to support your offshore blocks.
Jadesimi further commended the Nigerian legislators, some of who graced the conference, for announcing their unalloyed support for the industry through legislatures such as the Local Content Act 2010.
According to her, “We have some good laws already on the books which also need to be fully enforced, such as the Local Content Act, which we were pleased to learn is even now being strengthened through an amendment by our law makers.
Meanwhile, the LADOL MD has hailed the administration of President Muhammadu Buhari for promising to end corruption and the private foreign controlled monopoly in oil and gas logistics services that had stifled investment for so many decades.
In March this year President Buhari endorsed LADOL for taking a lead role in the implementation of real Nigerian content and for making strategic investments in critical infrastructure that has not only created thousands of jobs but also built a haven for international oil companies (IOCs) and their service providers in West Africa.
“Total Upstream Nigeria Limited has also shown tremendous faith in LADOL, by investing in the development in LADOL and carrying out onshore integration in Nigeria for the first time with its FPSO platform valued at $3.8billion. This will be a first in the sub- Saharan Africa and is a real game changer. Total must be commended for the foresight it has shown in making such a strong commitment to real local content and driving the industry down a path that will lead to sustained job creation and improving the working environment for all IOCs,” she said.