FG Pledges To Support Revival Of Kaztec Engineering’s $1bn Fabrication Yard
In its quest to encourage more Nigerian companies to invest in the country’s oil and gas industry and blue economy, and ultimately contribute to the nation’s economic growth, the President Bola Tinubu-led federal government has pledged its support towards the revival of the $1 billion Kaztec Engineering Limited’s oil and gas fabrication yard.
The oil and gas fabrication yard, is situated at Snake Island, Ilashe, Lagos State.
The Minister of Marine and Blue Economy, Mr. Gboyega Oyetola, gave the assurance on Sunday in Lagos, during his inspection and on-the-spot assessment of the fabrication yard, which has been shut down for the past eight years due to force majeure declared on it by Addax Petroleum, the project’s technical partner.
The Minister’s visit to the project site came a day after the Senate Committee on Petroleum (Upstream) led by its Chairman, Senator Eteng Williams, paid similar visit to the location as part of the upper legislative chamber’s commitment to investigating the reasons behind the project’s shutdown, to seek solutions for reviving the facility to revitalize the Nigerian economy.
The fabrication yard otherwise known as the Antan Project, estimated to cost about $1billion to complete, started in 2012 and was planned to support the drilling of over 19 million barrels of Nigerian crude.
The project which had already gulped over $600 million and attained 70 per cent completion was expected to be a one-stop-shop for the fabrication of offshore platforms, large offshore modules, Floating Production, Storage and Offloading (FPSO) refurbishment, and new build jackets.
It was also intended to provide facilities like pipe mill, pipe coating, dry and floating dock, logistics, supply base, and skills development and satisfaction of all the project delivery needs of oil and gas companies doing business in Nigeria and provide jobs for Nigerians.
However, for eight years, activities at the project site had ceased owing to a force majeure declared on it in 2015 by Addax Petroleum, the project technical partner, arising from taxes and audit issues between the federal government and Addax Petroleum.
The facility was projected to generate over $33 billion values in revenues and foreign exchange savings for the federal government over 10 years, in addition to over 3,000 direct jobs and over 10,000 indirect job opportunities for Nigerians.
Speaking after touring the facility and getting the necessary briefings from Kaztec officials, the minister, who was taken round the project site by the Chairman of Kaztec Engineering, Chief Emeka Offor, the company’s Technical Director, Mr. Mike Simpson, amongst others, assured the wholly-Nigerian firm that he would support it to resuscitate the yard.
He acknowledged that the company had been able to make massive investments in Nigeria despite the bottlenecks that had led to the halting of the project, saying the government would review all the concerns raised by the company with a view to resolving the issues and reactivating the fabrication yard.
Otetola said: “I want to assure you that we are going to support you in this project. You’ve spent so much and invested so much as a Nigerian. That’s the kind of thing we want to see happening in our country. So, whatever bottlenecks, issues, can be resolved.
“We will look at all these issues holistically to support you. We want to encourage Nigerians to be able to invest in Nigeria. That’s part of the Renewed Hope agenda of the president, and the fact that the ministry is created for the marine and blue economy, which is part of what you are doing here.
“You can be too sure you have my support in channelling your proposals, your observations, the constraints that have not allowed you to be able to actualize your dream of keeping this project on course.”
The minister, who described the project as a win-win situation for all, commended Kaztec for having so much capital tied down in the project for many years and still remained unrelenting.
He added: “I think that we should commend you. We will support you in anyway that we can. I thank the management for the commitment and passion to stay on the job. And we are trying to ensure that we have opportunities like this that will create jobs for our teeming youths. So, it sits as part of the eight pillars of the administration.
“Job creation is part of it. And with the kind of jobs you are talking about, it will at least take some of our youths off the streets, and that’s what is important.
“That’s something that we should be encouraging. I only need to know where government can come in. This is part of the investment opportunities in the Nigerian economy. So, we commend Emeka Offor, you have been doing so much here.”
Earlier, while briefing the minister, Offor expressed his excitement with the visit, saying “I’m happy that the honourable minister is here to see things for yourself.
“We brought you here to see the level of investment here and then the hardship the organisation has gone through due to non-patronage, due to the force majeure that we never caused, force majeure that was caused by Addax and the Nigerian government based on tax issues that we were not part of part of.”
Offor said Kaztec had already invested more than $600 million into the project, declaring the company’s faith in the current government as they had seen some massive changes.
He expressed his happiness that the government of the day understands the investments the company had done on the project.
According to him, thousands of jobs could be created from the fabrication yard both directly and indirectly with other benefits to the economy if it became functional.
Offor maintained that the project will also help the country to save foreign exchange in line with the government’s drive to conserve foreign exchange.
He further explained: “What we have done here is to conserve the foreign exchange by loading assets out from here without bringing assets from abroad, because when the IOCs are bringing these assets, if they are coming from the far east or Asia or the US, and it takes a minimum of 45 to 60 days.
“And some of these assets are charged $1 million to $2 million a day, depending on the size of the equipment, and you can imagine, if you are paying $1 million a day, times 60 coming and times 60 going and this affects us negatively.
“So, the model we have done here will stop all those wastage. And we are happy to be patronized. We want to be challenged. We want to make sure that we go back to the intention and manner of this project. The objectives of setting up this place was to help Nigeria.”
