Nigerian Content Development

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Nigerian Content Development
Engr. Dr. Russell Gilbert Engineering Projects
Director
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Nigerian Content
According to the Nigeria National Petroleum
Corporation (NNPC), Nigerian Content is the
quantum of composite value added or created in
the Nigerian economy through the utilisation of
Nigerian human and material resources for the
provision of goods and services to the petroleum
industry within acceptable quality, health,
safety and environmental standards in order to
stimulate the development of indigenous
capabilities.

• A big subject, so I focus on the Oil and Gas
  industry
• Provides 90 of the Nations foreign exchange
  earnings
• A major employer, especially in the Niger Delta
• Directly controlled by Government, through
  regulation and Joint Venture participation

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INDUSTRY PERSPECTIVE ON NIGERIAN CONTENT

• NIGERIAN CONTENT SUCCESSES
• Engineering - Domiciliation of Engineering has
  resulted in more work by design houses in
  Nigeria. International companies have often
  formed partnership with Nigerian companies.
• Fabrication- Progress in the upgrading of
  fabrication yards capacity and capability.
• Nigerian Content Support Fund has been
  established.
• Drilling Services Increased collaboration
  between Nigerian and multinational businesses
• Opportunities are on the increase for businesses
  in Nigeria.
• Training in key areas is being provided.
• SUPPORT REQUIRED TO BUILD NIGERIAN CONTENT
• Collaboration on vendor and capacity development
  initiatives
• Long term Frame Contracts (5yrs) in critical
  areas of local content delivery FEED/DE
  Studies, Seismic Processing Reservoir Mgt
  Studies Fabrication Manufacturing of Paints
  Cables Heat exchangers Valves to enable
  investors to achieve business stability.
• Faster tender approval process to create
  continuity of work and schedule for suppliers and
  contractors.
• Encourage new and JV partnerships between local
  and foreign companies through long term work
  commitment or sole sourcing as incentive for new
  entrants
• Better fiscal regimes for loans and financing

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Our Nigerian Content Development - Contracting

• 1998 - Indigenous Contracting Policy in Shell
• 2003 - Marine Engineering Services (Bayelsa) JV
  with Chinese company to acquire and operate a
  drilling rig
• 2005 Introduction of requirements for Nigerian
  Content in EPC contracts for the Gbaran-Ubie
  Project
• 2006 Government Directives for NCD
• Lone Star Drilling contracts to operate two
  rigs acquired by SPDC

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Project Overview Gbaran Ubie Phase 1

• Scope
• Wells 3 appraisal 8 gas, 17 oil
• CPF -1000 MMscf/d capacity (expandable to
  1400MMscfd) to process AG/NAG
• 120,000 bbl/d gross liquid capacity, 180 MMscf/d
  AG compression
• 340 km of infield flow lines and pipelines
• 3 x 11 MW power generation / distribution system
• Field Logistics Base to accommodate 200 staff
• 80 mmscfd Gas Supply to Niger Delta IPP

• Highlights (October 2007)
• All contractors mobilised and progressing works
  at CPF site, pipeline corridors and
  infrastructure projects
• Site preparation nearing completion
• Helipad operational
• Piling of CPF foundations ongoing
• Pipe-laying commenced
• All GMoU signed
• 15 contracts already awarded for local
  infrastructure development with a further 5
  planned for award in October

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Gbaran-Ubie Nigerian Content Plan
NC estimate based upon man-hours expended by
Nigerians in Nigeria
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Nigerian Content Fabrication Construction

• Daewoo Abam base fabrication facility preparing
  for welding/fabrication of steel piles, sheets,
  pipes etc. Estimated 450 Nigerians (currently
  230) to be employed at peak in mid 2008
• Major construction fabrication subcontracts
  awarded to Niger Dock (Prefabricated Steel
  Structures,  Other Vessels 1179 tonnes completed
  to date), Dorman Long (Condensate Storage Tank,
   Modularized Carbon Vessels) Alcon (FLB)
• Blocks for construction of site accommodation
  being supplied to Daewoo by Bayelsa company
  Reubenson Ltd.

Instrument Air Receiver Vessel Fabrication at
Niger Dock, Lagos

• Construction related subcontracts awarded to
  community based contractors include
• Craymond Nigeria (Daewoo, Security Fence/Gate)
• FACAA (Daewoo, Construction of Gate House)
• EPOXY (Daewoo, Construction of Mess Hall)
• Minim Tonye (Daewoo, Const. of SPDC Camp)
• Kariela Ltd. (Saipem, Dredging of sharp sand)
• Century Nig. Ltd. (Saipem, Construction of Camp)
• F.O.E. Famous Nigeria Enterprises (Saipem, Supply
  of Sharp Sand).                    

SAIPEM welders, Milford Imgbi Messaih Indighe
Rufus Okaripre Harrison Youmu making the first
weld on the Gbaran Ubie pipelines, 31st July 2007
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Nigeria Content Employment Capacity Building

• More than 3000 workers currently employed across
  the project, gt90 Nigerian
• Major contractors fulfilling Community Employment
  commitments
• Julius Berger 152
• Saipem Pipelines 271
• Saipem Field Logistics Base 115
• Daewoo 311
• Communities and PAC working directly with local
  contractors for delivery of GMoU Projects

• Six Cacasa Nigeria Ltd engineering trainees
  complete six month assignment to CPF design
  offices in Camberley. Six Nigerian Graduates
  (SPDC/DPR) continuing their development
  programme.
• 90 Community Workers already trained in
  construction trade skills at PTI and Saipem (of
  220 planned)
• SPDC funding renovation of Ekowe Technical
  College. SPDC to sponsor 100 students in
  Enterprise Development skills

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Our performance so far .

• 138 bln Naira worth of contracts awarded to
  Nigerian companies in 2006
• Moving to more hi-tech and demanding work
• Two 120 tonne surge vessels to Dorman Long
  largest in the Shell Group
• 4-D Seismic
• Establishment of Shell FEED office in Port
  Harcourt with 80 Nigerian staff using most
  advanced 3-D design software
• Also aiming to use small community contractors
  to execute more work, to maximise benefits to
  local population
• Long-term Engineering Services contract with
  NETCO to provide design and procurement services
  etc.

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Supporting Human Capacity in Engineering

• Technical professionals can only rise from a
  sound educational base
• Shell involvement in education
• 2,600 Scholarships for secondary school-children
  in the States where we operate
• University Scholarships
• Shell Intensive Training Programmes - 44-week
  courses run in Warri
• SITP/1 for new Graduates 100 per year to
  progress into Engineering, Geosciences and IT
• SITP/2 for school-leavers to progress into
  Technician roles and City and Guilds
  qualifications
• 1,700 Nigerians trained so far
• Structured Graduate training scheme of training
  and on-the-job experience to progress to the
  first Professional appointment
• University Chairs and sabbaticals for Lecturers

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In summary

• Higher Nigerian Content in the oil industry is
  achievable and improvements are already under way
• To grow, companies need consistent markets,
  access to low-cost finance and supportive
  infrastructure
• Repeated competitive tendering to a wide range
  of suppliers is unhelpful
• The encouraging move into design and large-scale
  fabrication needs support from a vibrant
  education system
• Thank you