After many years of shifts in Final Investments Decision (FID), Shell, in 2017, gave a green light on development of Bonga South West Aparo (BSWA) deepwater project. ADEOLA YUSUF looks at efforts to get the project and others on board to spur the growth of local content
Simbi Wabote, Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), did not mince words on expectations of the Federal Government from the three major offshore projects on-going in Nigeria.
On Bonga South West Aparo deepwater project alone, the government, he said on the sideline of a conference in Lagos, was expecting one billion barrels of oil and an expenditure of over $10 billion.
Riding on the back of this is expectation that the project will help promote the local content development. Shell Nigeria Exploration and Production Company (SNEPCo) is the major title-holder of the project and it had not, for once, failed to make a pledge to raise local content development through the project.
A final investment decision is targeted for 2018, with first oil flowing in 2021 or 2022.
The FPSO aims to exploit around 800 million barrels of recoverable oil from an oil-in-place resource of about 3.2 billion barrels. The bulk of Bonga South West’s resources are located in OML 118 but it also extends into OMLs 132 and 140, operated by US supermajor Chevron, where it is called Aparo and the remaining partners in the field are US giant ExxonMobil, France’s Total, Italy’s Eni and South Africa’s Sasol Petroleum.
Wabote said Royal Dutch Shell is to fabricate 50 per cent topsides of the project in Nigeria.
The NCDMB boss indicated that the packages included the Floating Production Storage and Offloading (FPSO) units, subsea, installation and rigs.
Expressing optimism that the execution of the project and Zabazaba, another deepwater project, in which Shell also has a stake would grow Nigerian Content and impact the economy, he said that this would be much more than previous deepwater projects. He said the Board carried out detailed scoping of the project to ensure that the targets exceed the accomplishments achieved on Total’s Egina.
Wabote said that for Egina, six FPSO topside modules were fabricated in-country across some yards and will be integrated when the FPSO arrives at the SHIMCI yard in Lagos later this year.
This will be the first time in the history of Nigeria. Wabote also said that the entire approvals and evaluations for Zabazaba were completed in 14 months, setting a record in the industry as against the 24/36 months project cycle time that bedevilled the sector for many years and contributed to the high cost of projects.
“It has taken just 14 months since NAE approached the Board with their Nigerian Content Plan.
NAE and NCDMB worked closely and went through the standard contracting process, including invitation to tender, clarifications, technical and commercial bid evaluations and facility audits.
We completed the process and issued our final report on August 30, he had said. “This is confirmation that NCDMB does not delay projects and we can achieve the six-month contract cycle target if operators comply with set directives.
“Similarly, (SNEPCO) is set to issue bid documents this month for the supply of the FPSO vessel for the Bonga South West Aparo (BSWA) deepwater project.
“The bid documents will set out the company’s plans for in-country fabrication of half of the topsides of the FPSO and their integration.”
South West FPSO tender
Contractors, Upstream had reported, are chasing prized deal to supply unit for revamped deep-water project off Nigeria. Supermajor Shell, the energy news agency said, would receive responses within days from contractors set to battle for a prized contract to supply a floating production, storage and offloading vessel for its revamped, deep-water Bonga South West project off Nigeria.
Industry sources said a significant number of floater fabricators had sent expression of interest documents covering a 150,000 barrel per day FPSO and must file submissions next week.
Among the players expected to reply to Shell’s approach are South Korean rivals Hyundai Heavy Industries and Samsung Heavy Industries, Chinese companies Cosco and CIMC Raffles as well as Dutch floater specialist SBM Offshore.
Upstream was also told that South Korea’s Daewoo Shipbuilding & Marine Engineering, Singaporebased SembCorp Marine, Italy’s Saipem and Malaysia’s Bumi Armada may participate, as could KBR, either as lead bidders or partners.
Shell’s base-case plan is said to comprise the award of an engineering, procurement and construction contract for a newbuild FPSO but project watchers said that the supermajor will consider a converted vessel if newbuild costs do not meet its expectations.
“The basic, basic option is a newbuild,” said a well-placed source, “but each bidder can propose an alternative (conversion) option.”
Another project watcher agreed: “Basically, Shell is going for a newbuild EPC but they are going to get indications about the (conversion) concept and if this is attractive, (Shell) will think about it.”
A third source added: “Shell has been evaluating the various options, going the newbuilds route or going conversion with lease.”
Local content remains a key factor in any Nigerian tender process with the EoI documents calling for lead companies to specify their partners and which Nigerian engineering and fabrication companies they could work with. Upstream understands that CIMC Raffles has tied up with Monobuoy Nigeria, a Lagos-based engineering concern that has a parent company from the US, while Cosco has joined forces with Technip and Abuja-headquartered Gastec.
One source also suggested CIMC may be co-operating with VME Process — a US-owned module fabricator with yards in Indonesia and Malaysia — and China Merchants Industry Holdings, owned by Hong Kong-based China Merchants Group, which is experienced in FPSO conversion work. SBM is said to have linked up with China’s COOEC but its Nigerian partner is not known.
The same is true for Hyundai and Samsung, although in previous Nigerian projects and bid processes they have worked with NigerDock and Ladol, respectively. It is not known, which companies Daewoo or SembCorp — which owns Jurong Shipyard in Singapore — would partner with if they do participate in the Bonga South West EoI.
Upstream understands that the EoI’s call for respondees to tell Shell, which yards will handle major construction and associated activities.
This EoI process is a precursor to a formal bid process, which one source suggested could start as soon as July this year.
However, the exact timing will depend on when Doris Engineering and Lagos-based Netco complete front-end engineering and design work on the FPSO. This FEED work was originally due to complete this summer but appears to have slipped into the third quarter of 2017 or even the fourth quarter.
Presenting a paper on Bonga Southwest Aparo reframed project /scope and proposed Environment Impact Assessment (EIA) plan, Raphael Afolabi of Shell, said they have updated the concept and it is now going to run from 2018-2023 in three phases. He said, “they are expecting one billion barrels of oil from Bonga project, and would expend over $10 billion; technical works are going, while stakeholders have been very supportive.
We would come back to government.” He said the Federal Government had to reframe Bonga because of low oil price, promising that optimum Nigerian content would be applied in all cases, and go beyond this project.
Two international oil companies (IOCs) – Nigerian Agip Exploration Limited (NAE) and Shell Nigeria Exploration and Production Company (SNEPCO) – have concluded plans to fabricate and integrate over 50 per cent of the topsides of their projects’ floating, production, storage and offloading (FPSO) vessels in Nigeria.
This is targeted at expanding and deepening local content in the nation’s oil and gas industry.
According to Nigerian Content Development Board (NCDMB), the projects are the Zabazabadeepwater project being executed by NAE in partnership with SNEPCO on Oil Prospecting License (OPL) 245 and the Bonga South West Aparo (BSWA) deepwater project being developed by SNEPCO.
NCDMB disclosed in a statement that indications emerged last Friday that major contractors bidding for Zabazaba submitted competitive costs and concrete plans to fabricate and integrate over 50 percent of the FPSO topsides in-country.
It stated that the technical and commercial evaluations of bids for the Zabazaba main packages have been finalised by the NCDMB and NAE and the submissions met the aspiration of maximizing local content at the most competitive cost.
Consultation for exploration
The Federal Government has commenced consultations with stakeholders in the oil and gas sector, aimed at re-activating Shell Nigeria Exploration and Production Company Limited (SNEPCO), the Bonga oilfield.
At the bi- annual stakeholders’ engagement meeting in Abuja, Minister of State for Environment, Ibrahim Jibril, said the oilfield is very important to Nigeria, and both should implement its mandate for the sustainability of the project.
Represented by the Director of Environmental Assessment, John Alonge, he urged SNEPCO to make integrity, transparency as its watchword, in all transactions.
He stressed that there must be compliance because both have lots of issues to contend with.
According to him, Shell and the ministry must have social and technical dialogues so that both would be on the same template to move the project forward.
An Environmental Manager, Augustine Ibukun, said oil producing communities would continue to have negative impacts, adding that the multinationals should see how to open dialogue and discussions with them and work out plans to eliminate emission.
Beyond these rhetorics, Nigerians must not be shortchanged in terms of promises for local content development in the Bonga South West Aparo projects and all other projects. Shell has made its promises, the onus is now on the NCDMB to ensure strict adherence to its Acts on local content development.
Telecoms’ GDP leaps to 1.8% growth
From a decline of -3.28 per cent in the fourth quarter of 2017, Gross Domestic Product (GDP) growth rate in Nigeria’s telecommunications sub-sector jumped to 1.8 per cent in the first quarter of this year, New Telegraph has learnt.
This, according to latest data from the National Bureau of Statistics (NBS), shows a general improvement in the Information and Communication sector.
The telecoms and information services, which come under the Information and Communication sector in the NBS’ categorisation of economic activities, had in the last three quarters recorded negative growth rate as it fell by 1.9 per cent in second quarter 2017. In the third quarter of same year, it also went down by -5.68 per cent. By fourth quarter, the sector still went down by -3.28, even at the time when the overall GDP growth rate of the country looked positive.
However, the telecoms sector has shown remarkable signs of growth since the beginning of this year as subscriber data continue to surge.
Analysis of active mobile subscriptions in the first three months of the year shows that the telecom operators added 4.2 million subscribers within the period. Data subscriptions on the four GSM networks also crossed the 100 million mark in January and have maintained a steady growth.
The Information and Communication sector is composed of the four activities of Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording and Music Production and Broadcasting. In nominal terms, the first quarter of 2018 saw the sector grow by 1.79 per cent (year-on-year) , a 7.25 per cent points decrease from the rate of 9.04 per cent recorded in the same quarter of 2017. However, it is 2.34 per cent points higher than rate recorded in the preceding quarter. The quarter-on-quarter growth rate was 3.58 per cent. The Information and Communications sector contributed 10.64 per cent to total Nominal GDP in the 2018 first quarter, lower than the rate of 11.43 per cent recorded in the same quarter of 2017 but higher than the 10.04 per cent it contributed in the preceding quarter.
The sector, in the first quarter of 2018, recorded a growth rate of 1.58 per cent in real terms, year-on-year. From the rate recorded in the corresponding period of 2017, there was a decline by 1.15 per cent points. Quarter on quarter, the sector exhibited a growth of –4.15 per cent in real terms. Of total real GDP, the sector contributed 12.41 per cent in 2018 first quarter, lower than in the same quarter of the previous year in which it represented 12.46 per cent but higher than the preceding quarter, in which it represented 11.35 per cent.
Analysts see the growth rate as a positive sign of more economic activities in the sector, leading to job creations and increased contribution to the economy.
Citing the NBS statistics, Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof. Umar Danbatta recently disclosed that the telecoms sector in the first quarter of 2017 contributed N1.45 trillion to the GDP, adding that in the second quarter, the figure rose to N1.549 trillion.
“This performance at a period of recession is very remarkable,” he said. “We are keeping dates with the NBS to identify and track how these trends progress. On the aggregate, the telecoms industry’s contribution to GDP in Nigeria stands at 10 per cent.
“But the figures may not tell the entire story. Investments in the sector, in human and material resources, have continued to soar. In 2001, the telecom sector could boast of a mere $50 million worth of investments but as at September 2017, we have investments worth $70 billion. The Value Added Services (VAS), segment of the telecom market in Nigeria today is worth $200 million and is estimated to grow to $500 million by 2021. The industry has provided both direct and indirect employment opportunities, accentuated growth and expansion.”
Reps probe Pencom over alleged financial mismanagement
The House of Representatives has resolved to investigate the National Pension Commission (PENCOM) over alleged reckless financial management of retirees’ funds and infraction on the public procurement Law. The House has consequently mandated its committee on public procurement and pensions to carry out a comprehensive investigation on alleged monumental fraud ongoing at the commission.
The decision followed the passage of a motion sponsored by Hon. Zakariya Galadima on the “need to investigate the alleged violation of provisions of the public procurement Act and financial mismanagement by the National Pension Commission (PENCOM)” During debate, the legislators faulted the commission over several financial infractions as against the principles and objectives of the provisions of the Pension Reform Act, which required the commission to collect and utilize fees, levies and penalties prudently in accordance with its regulatory and compliance roles. For instance, part of the 2014 Act authorizes PENCOM to invest the retiree funds in order to generate revenue but the lawmakers are worried that such investments powers of the agency have been grossly eroded by financial abuses.
In his lead debate, Galadima faulted the agency over several financial mismanagement while expressing worry that PENCOM engaged in fraudulent practice by investing N1billion into Aso Savings and Loans Plc under its investments portfolio at a ridiculously low interest rates and further directed Aso to lend the money to MGSL Mortgage Bank Limited where a top PENCOM management staff has interest.
Confectionery firm hosts BBNaija ex-housemates
Infusion Cakes & Cafe, a Lagos-based confectionery firm, has hosted ex-housemates of the reality TV show, Big Brother Nigeria (BBNaija), in a meet and greet session in Lagos recently.
Founder and chief executive of Infusion Cakes & Cafe, Mrs. Ibigbeye Okobi, in a statement, said the company decided to host the BBNaija ex-housemates because: “We really enjoyed the free spirit they exhibited, how natural they were and how they were able to get Nigerians to actually get engaged in everything they did while in the house.”
Okobi said the management of Infusion Cakes & Cafe also felt that the location of the company in the highbrow Lekki area of Lagos would serve as an excellent platform for Nigerians who were keen to meet the ex-housemates, get to know and interact with them in a friendly and hospitable environment to really appreciate them.
Infusion Cakes & Cafe is a modern bakery and cafe where customers can get a combination of international and locally made cakes, coffee, pastries and desserts for refreshment, weddings and special occasions like birthdays and anniversaries, among others.
The highlight of the event was a competition for the decoration of cakes. Participants in the competition included the reigning Miss Nigeria, Miss Mildred Peace Ehiguese; one of the BBNaija ex-housemates, Anto; and a representative of Team Definition, a band of musical artistes which entertained guests at the session.
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