Â ENERGY INTERVIEWÂ
An indigenous company, MG Vowgas Limited recently set a new record in Nigerian content development with the completion of its state-of-the-art Mount Zion Fabrication Yard in Woji area of Port Harcourt in Rivers State. Group Managing Director/CEO of the company, Mr. Godwin Izomor spoke to Ejiofor Alike on local capacity development in the industry. Excerpts:
With the signing into law, the Nigerian Oil and Gas Industry Content Development (NOGICD) Act on April 22, 2010, indigenous manpower and facilities are increasingly deepening their participation in Nigeriaâ€™s oil and gas industry by building local capacity and capability.
The insistence by the Nigerian Content Development and Monitoring Board (NCDMB) that the execution of large components of any project should be domiciled in-country, indigenous players have demonstrated capacity to deliver more challenging jobs, thus ensuring that the funds that could have left the shores of Nigeria for financing projects are retained in the Nigerian economy.
The increasingly heavy investment in the development of local fabrication yards and manpower building has led to the acquisition of new skills sets by Nigerians and the growth in the countryâ€™s Gross Domestic Product (GDP).
For instance, MG Vowgas is an EPCI – engineering, procurement, construction, installation and maritime company operates in Nigeriaâ€™s oil and gas sector with a safety certification from BSI, a UK-based safety regulation and certification agency.
As a confirmation of its adherence to global safety and quality standards, the company has also obtained British standard on safety and is currently awaiting ISO: 9001 certification.
The Group Managing Director and Chief Executive Officer of the company, Mr. Godwin Izomor has also disclosed that the company is also currently pursuing ASME-U certification to enable it have the capacity to build pressure vessels and even nuclear power tanks.
Current fabrication capacity
The companyâ€™s recently completed state-of-the-art Mount Zion Fabrication Yard in Woji area of Port Harcourt in Rivers State is equipped with automatic welding machines that can weld stainless steel and one is equipped with camera.
Izomor stated that no fabrication yard in Nigeria could fabricate steel of more than 25 millimetre thickness but Vowgas has the capacity to fabricate 200 mm thickness.
â€œNo fabrication yard has more than 25mm thickness. But this place has 200 mm thickness. This is the only place that can fabricate 200 mm in Nigeria,â€ Izomor added.
â€œWe have plasma cutting machine that can cut up to 200-millimetre thickness of plates. We have rolling machine that can roll up to 200 mm thickness plates. We have three automated welding machines that can weld aluminium and stainless steel,â€ Izomor said.
According to him, his company offers a lot of services ranging from the fabrication of pressure vessels, modules, offshore structures and FPSO (Floating Production Storage Offloading) structures and topsides
â€œWe built this place to reduce of taking our money abroad. Can you imagine that all these foreign companies have been in this country for the past 20 years but none of them has a yard in Nigeria that can even fabricate a container? Why? The reason is that they know that if they build a yard here, their people will not be employed.Â Â So, it is our foolishness that kept Nigeria where we are today. Now, we have to believe in ourselves to start doing things in this country,â€ he said.
Izomor said that even without jobs, his company has over 120 workers in its payroll and has the capacity to employ over 500 workers when there is a job to be executed.
He argued that the country should insist that jobs must be done in-country to create employment opportunities for Nigerians.
Indigenous yards now have capacity
Speaking on the excuse by the international oil companies (IOCs), that jobs are taken away from local companies because they donâ€™t have capacity, Izomor insisted that local firms now have the capacity to execute complex fabrication jobs.
â€œThat is why we built this yard so that the IOCs cannot give excuse that Nigeria does not have the capacity. Basically, we have expatriates residing here that will give assistance to our local capacity,â€ he said.
â€œBefore now, barges and tug boats are imported from Europe and America under the flimsy excuse that Nigeria did not have the capacity. But today, we have fabricated a lot of equipment without any assistance from anybody. The barges and tugboats we use now in the industry are fabricated here in Nigeria. It is left for the government to support the local companies to insist that all the jobs must be domiciled in Nigeria. They should insist deliberately,â€ he explained.
â€œThe difference between this yard and other yards is the kind of equipment that we have. Nobody in Nigeria has the kind of equipment that we have. Anybody can go round to confirm that no other yard has what we have. We are importing two major equipment. One is the oven. Our furnace has the capacity of 1,600 degree centigrade and is about 200 tonnes furnace. Then, till today, we still import the flanges from India and some other countries. Even the other yards in Nigeria still import those flanges from abroad. But we are the only company that is going to have it here in Nigeria,â€ he added.
He also stated that jobs executed locally meet international standard, stressing that quality is key consideration by the oil majors in awarding jobs.
â€œWithout quality process, you canâ€™t win a job. So, it is for us to insist that jobs should be done locally,â€ he said.
Tackling security challenges
Izomor stated that with the world-class facilities and personnel on ground, there is no longer any excuse by the IOCs to take their fabrications jobs to foreign lands and promote capital flight.
Â He urged the federal government to assist local firms by significantly improving electricity supply in the country as well as ensuring a perfect security service.
According to him, it is costing the companies a huge amount to provide electricity and security, which ultimately increases the cost of doing business.
â€œBut you cannot cut costs in the industry when you donâ€™t have security. Security increases cost in the industry. For instance, I spend over N27 million every month on security here. In Bayelsa where I am working, I have gun boats and military personnel. I spend over N30 million on fueling and everything monthly. When you calculate at the end of the day, you will find out that you spend over N500 million yearly on security. How much do you produce here? The government should re-negotiate with the different groups agitating for different reasons. I am a businessman and I donâ€™t want to go into the demand of each ethnic group. It is not my business. My business is to do business while the government gives us security,â€ he explained.
Speaking at the end of the facility tour of the fabrication yard, the Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Kesiye Wabote, declared that the modern fabrication yard complex deserves to be greatly patronised by the oil industry operators since it has everything that is required forÂ fabrication and ship engineering services.
Â Wabote said he was pleasantly surprised and impressed at the quality and number of machines, workshops and equipment available at the complex.
â€œI am blown away by what I have seen here. I am excellently impressed by the facilities tucked away in this part of Port Harcourt. Most of the global fabrication yards started like this and we have to assist this great initiative to growâ€, Wabote added.
Â In commending the industrial outlay of the fabrication yard, Wabote pointed out that the magnificent office complex, trained workforce and the high caliber equipment and facilities are sufficient to â€œtake any FPSO, as far as I am concerned, and you also have a water depth of seven metres, which is a very good advantageâ€.
Â He promised to ensure that â€œwork scope that this yard can handle in the oil and gas industry is given to this yard, and to ensure that this yard participates in competitive and transparent bidding process, so it can become the lead contractor instead of becoming a sub contractorâ€, stressing that â€œthis is an amazing facility and with a little encouragement, they will do much more than what we have hereâ€
For the Nigerian content to get to the next level of implementation, Izomor said there were challenges that needed to be surmounted.
â€œWe have problem of security; we have problem of electricity; we have problem of accessing funds. Then, we have problem of the industry not being supervised properly to ensure that the IOCs do not take the little jobs available outside the country,â€ Izomor said.
These are major tasks facing both the federal government and the NCDMB to ensure that Nigeria is at par with Norway, Indonesia, Brazil, United States and other countries that have built sufficient local capacity in the oil and gas sector.