Nigerian Oil Firms Emerging Stronger Competitors- NNPC
The Nigerian National Petroleum Corporation (NNPC) said that Nigerian companies are making giant strides, adding value in the oil and gas sector through capacity building. It views emerging trends in the industry as providing opportunities for local players to stand firm as strong competitors with foreign companies.
Group managing director of the NNPC, Maikanti Baru said this during a presentation on the topic ‘Collaboration and Local Capacity Development as an Enduring Strategy in a Low Oil-Price Environment’ at West African International Petroleum Exhibition and Conference (WAIPEC) forum in Lagos.
He noted that the industry has been fortunate to have had previous and current regimes that have recognized and promoted the establishment of institutions, enacted laws, identified key areas that can stimulate economic growth and provided the necessary support to businesses and companies that are willing to impact positively on the economy.
Citing a typical example of the success story of collaboration – TUPNI Egina (Total) FPSO DED Topside, Baru recalled that the Detailed Engineering Design (DED) of the Topside of TUPNI’s Egina FPSO project delivered safely, on time and within budget by a consortium of Nigerian Engineering companies led by NETCO.
The GMD said the project was a good example of successful collaboration and capacity development, adding that no engineering project of this magnitude has been handled locally because as no single local company had the capacity to do so.
“The management of NNPC in its wisdom approved for three local companies to collaborate and support the local execution of this project. This decision paid-off and has placed on record that over 80 per cent of the associated man-hours which was in excess of one million man-hours on a single project can be effectively executed in one project location in Nigeria” he said.
Listing the achievements associated with that, he said the project was the first of its kind In-country consortium arrangement which was successfully delivered, safely, on schedule and within budget, achieving zero LTI during the execution
The project also ensured domiciliation of engineering in-country and achieved Nigerian content goals of 80 percent by recording about one million man-hours out of which 90 percent of it was carried out by Nigerians. The job also showcased resilience of Nigerian engineering companies, on the Job training to grow capacity in-country and above all contributed to Gross Domestic Product (GDP)
Speaking on the potentials and opportunities in the current low oil price business environment, Baru added that the collaborative success story of the DED of Egina FPSO project, which represented only a maximum of 10 percent value chain of the FPSO, has indeed repositioned the Nigerian Engineering companies.
“Rather than being the traditional competitors, they are now partners in progress and they are expanding their synergetic arrangements in readiness to take up other projects of this magnitude.
Examples of such upcoming projects are; SNEPCO’s Bonga South-West FPSO projects, NAE,s Zabazaba FPSO project, ExxonMobil’s Bosi FPSO Project, NLNG Train 7 and/or NLNG Debottlenecking Project, etc” he said.
He argued that if so much can be said to have been achieved with DED which represents just about 10 percent of a typical FPSO project, one can only imagine what other opportunities exist in the remaining 90 percent of the project value chains in the procurement and construction scope of work for such projects which are characterized by high requirements for expertise, finance and other capacity requirements.
He said further, “It is imperative that local companies rendering services in this larger segment need to emulate the Engineering companies by coming together to position themselves for effective competition with international companies who currently have a competitive advantage in this current low price regime.
It is said, that in any business “you only get what you negotiate not what you deserve”, and off-course good negotiations are done from a position strength.
Thus is now imperative that Nigerian companies should consider collaboration and synergy to grow from being the boys to become the men, work cooperatively together, demonstrate greater capacities which will position them to take up opportunities reserved for the big foreign players.
The key to successful collaboration is to set shared goals, agree on rules of engagement at the onset and play by the rules to achieve a successful outcome” he added.
