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2/01/2018

MORE OIL, REVENUE FOR NIGERIA AS EGINA NEARS PRODUCTION

MORE OIL, REVENUE FOR NIGERIA AS EGINA NEARS PRODUCTION
After 14 years of discovery, the Egina oil field located offshore Nigeria in oil mining lease (OML) 130 and operated by Total
Upstream Nigeria Limited (TUPNI), is set for first oil in the last quarter of this year. The floating production, storage and offloading (FPSO) vessel berthed at the SHI-MCI, LADOL shipyard for integration of some topside modules fabricated at the shipyard located LADOL Free Trade Zone (FZE) in Lagos. EMEKA UGWUANYI examines the project and its benefits to the economy. On January 24, about 2.30pm, the floating production, storage and offloading (FPSO) vessel that will produce the 200,000 barrels per day (bpd) Egina oil field located offshore Nigeria in oil mining lease (OML) 130 berthed at the SHI-MCI, LADOL shipyard in Lagos, Lagos State.
The stopover was designed to enable the integration of the six modules fabricated at the LADOL shipyard to the vessel. The modules include water injection, chemical injection and crude oil discharge package, among others. These modules were fabricated in Nigeria as part of Nigerian Content (local content) input into the Egina project. The integration in Nigeria was also meant to further boost local content and indigenous capacity and skills development, hence, it was not shipped to Samsung Heavy Industry (SHI) shipyard in Goeje, South Korea, where the vessel was built.
The fabrication and integration of some substantial parts of the Egina FPSO in Nigeria will remain a historical landmark that opened a new vista in Nigeria’s upstream operations especially in deepwater oil exploration and production. The Federal Government should ensure no oil firm goes below the Egina project’s performance. The quantum of fabrication undertaken by Nigerian companies for the FPSO underscores the denial of value creation in the economy and skills development of the locals over the years. The milestone is even more pronounced as a global multinational, Total, is involved, disproving years of perception that Nigeria and Nigerians lack requisite skills and the environment for such a huge capital intensive project to be carried out.

Considering what this project stands for in Nigeria’s oil and gas space, now and for the future, the Federal Government needs to ensure the security of this vessel while the integration of the six modules fabricated at LADOL lasts and ensure the arrival at its final destination, the integration of the remaining components and commencement of operation. Besides, there is a projection that oil price will remain between $60 and $70 per barrel through 2018, therefore, the field will commence operation when oil price is fairly good. The Managing Director/Chief Executive, Total Upstream Companies in Nigeria, Mr. Nicolas Terraz, speaking at a ceremony to mark the arrival of the Egina FPSO at the SHI-MCI Yard, LADOL Island in Lagos, said it was a truly historic day, as it is the first time that a deepwater FPSO is being berthed at a quayside in Nigeria for lifting and integration of six large topside modules, which were fabricated locally.
“To put the significance of this moment in perspective, here are a few Egina records – the Egina FPSO is the largest ever installed in Nigeria, it is also the largest FPSO built so far by the Total and 12,500 tons of equipment will be lifted and installed on the FPSO,” he said. Bear in mind that 15,000 tons were fabricated in Nigeria.

He further noted that the crane at the LADOL quayside was the biggest crane ever erected in  the country.
He said: “But beyond these facts and figures, it is important to point out that the integration of the FPSO topside modules here is a game changer for the industry in terms of Nigerian Content. These activities here are a visible and concrete demonstration of our commitment to make meaningful contributions to the development of local capacity and they are the product  of collaborative work between Total, Nigerian National Petroleum Corporation (NNPC), Nigerian Content Development and Monitoring Board (NCDMB) and our OML 130 partners – CNOOC, SAPETRO and Petrobras.
“The project was launched amidst considerable risks. But today, it stands as a testimony to our continued commitment, belief and faith in the future of Nigeria.
“None of this would have been possible without the support of partners and key stakeholders. And for this, I wish to extend the profound appreciation of Total to the Nigerian Ports Authority (NPA); the Department of Petroleum Resources (DPR); the NNPC; NCDMB; National Petroleum Investment Management Services (NAPIMS) and our partners. “I also wish to thank the Nigerian authorities that have been involved in ensuring a safe and secure passage for the FPSO. And here, I must thank, in particular, the Nigerian Navy; the Nigerian Immigration Service; the Nigerian Customs Service and the Nigerian Maritime Administration and Safety Agency (NIMASA).
“I must also express our sincere appreciation to the Management and staff of Samsung Heavy Industries (SHI) and LADOL. Ours is clearly a partnership that creates great results and we are very delighted with how far we have come on Egina. We look forward to a successful completion of the next chapter of the Egina story.
“To our own staff working on the Egina Project, please accept the heartfelt appreciation of the Management on this milestone. We are in the final stretch of the project and we are counting on you to sustain the momentum and safely lead us to First Oil on schedule and on budget. ‘’Let me conclude by pointing out that our plan is to complete the topside installation works in six months and sail away to the Egina Field in July. And to make this phase of the project a success, I wish to appeal to all our partners to continue our legacy of achievements.”
 For the Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala Usman, it was the first time the NPA and the country would be handling vessel of such  size. “This is the first time the NPA and by extension, Nigeria, would be handling any vessel of this size, we therefore, congratulate Total, LADOL Free Trade Zone and Samsung Heavy Industry for the synergy from which this venture emerged.
“We recognise that the magnitude of this project presented the NPA with the opportunity to, once again, showcase our unrelenting efforts at building capacity to meet the needs of customers across board. We are grateful for this unique partnership and look forward to more of such.


“This project put a demand on the NPA to facilitate the berthing of the FPSO for the completion of its construction at Lagos Harbour. It also furthers the Federal Government’s local content policy with multiplier effects evident in employment opportunities, capacity building, technological transfer, cost saving, reduction in capital flight as well as the attraction of oil and gas hub to Nigeria for the sub-region.
‘’The FPSO project is an attestation to the constant infrastructural and operational preparedness of the NPA. At the NPA, we are conscious of the inherent opportunities that challenges present and successful berthing of this huge vessel testifies to our capacity to provide improved services to the oil and gas industry,” Usman said.
The General Manager, Projects and Operations,  Nigerian Content Development and Monitoring Board, Paul Zuhumben, who represented the Executive Secretary of Board, Simbi Wabote, praised the efforts of Total and partners for the milestone achieved and assured of the Board’s support at all times. He, however, noted that Egina project created a lot of employment for Nigerians but the issue is where will all these people be engaged on completion of the project. The question called for an appeal to Total and other international oil companies to quicken the development of  their undeveloped assets to retain these people in employment.
The Egina project has a total budget of $16 billion covering all activities of the project including the field development and the FPSO.  Six out of the 18 topside modules of the FPSO were fully fabricated in Nigeria and will be integrated on the FPSO at SHI-MCI yard, Ladol Free Zone Lagos, within the next six months. After the integration, the vessel will commence its final sail-away to the Egina field.
The FPSO has a length of 330metres, width of 61 metres and depth of 33.5 metres with storage capacity of 2.3 million barrels and it is the deepest offshore project undertaken by Total Group.

The buoy, manifold, pressure vessel, crane pedestal, flare tower, piles and risers, among others, were all done in Nigeria by different companies with a multi-disciplinary field operations team of about 280 persons offshore and onshore. Over 15 local companies won one contract or the other resulting in 24 million man-hours job in Nigeria, 560,000 man-hours of human capacity development, fabrication 60,000 tons of equipment and training of 250 Nigerians in-country and abroad.

The field will increase Nigeria’s oil output by 10 per cent at first oil.
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