The Nation Newspaper

Tag: Egina

  • With Egina, Total eyes 23 percent of Nigeria’s production

    Upon completion of Total’s Egina project targeted to add 200,000 barrel per day to Nigeria’s oil production, the company would be boasting of contributing 23 percent of the country’s national production.

    Its Deputy Managing Director, Deepwater District, Musa Kida, made this known at the second Nigeria International Petroleum Summit in Abuja yesterday.

    The theme of the summit was “Shaping the future through efficiency and innovation.”

    According to Musa, owing to the company’s determination to support local content development, 77 percent of man-hours worked on the project executed locally with 60,000 tons of equipment fabricated in Nigeria by local contractors.

    Besides, drilling records and integration of six locally fabricated top side modules in Lagos; other significant achievements, the Egina project achieved the first for Nigeria and Africa.

    His words: “Total’s projects in Nigeria have been industry benchmarks with regard to efficiency and innovation.

    “The one on the lips of everyone at the moment is Egina. At Plateau, Egina will add 200,000 barrels of oil per day to Nigeria’s current production and this represents about 10% of Nigeria’s current production.

    “With Egina, Total will be operating about 23percent of the national production and we are proud to be significant contributors in securing Nigeria’s oil and gas future.

    “Egina set unprecedented records of local content and capacity building.

    “For us, Egina stands as a great testament to Total’s commitment to Nigeria and our determination to support and advance local content development. 77 percent of man-hours worked on the project was done locally with 60,000 tons of equipment fabricated in Nigeria by local contractors.

    “In addition to drilling records and integration of 6 locally fabricated top side modules in Lagos; other significant achievements, the Egina project achieved the first for Nigeria and Africa.”

    Total, he said, is today, the only IOC still active in the downstream sector with more than 550 filling stations nationwide.

    The company’s downstream operation is so diverse in Nigeria that there is a TOTAL filling station in every local government of the country, he added.

    According to him: “We are also active in the solar energy with our AWANGO lamps that address the electricity needs of rural communities not connected to the national grid.”

    He said Total is the only integrated International Oil Company with presence throughout the entire value chain of the industry in Nigeria Downstream, Upstream and Midstream sectors.

    According to him, Total has developed a strong partnership with the Nigerian National Petroleum Corporation (NNPC) and other partners.

    Also speaking, Executive Secretary of the Nigerian Content Development Monitoring Board, NCDMB, Mr. Simbi Wabote, warned if local content was not encouraged in the African petroleum industry, Europe and the rest of the world would in the next 20 years, witnessed massive influx of people from Africa and its attendant crisis.

    He advised foreign countries to stop accepting jobs meant for African countries and instead encourage the domestication of petroleum jobs in Africa.

  • 2019 budget financing: Egina, others offer succour

    Nigeria may not find it difficult to finance the N8.7trillion 2019 budget contrary to analysts’ and industry stakeholders’ view. The rise in crude oil output by 200,000 barrels per day (bpd) from Egina field alone and other oil recoveries, according to former Managing Director, Nigeria Liquefied and Natural Gas (NLNG) Mr. Godswill Ihetu, will come handy.

    The 200,000 barrels per day production from the Egina facility, Ihetu said, is a good omen to Nigeria, especially as oil price has begun to rise after falling to $51 per barrel at the close of last year.

    In an interview with The Nation, he said the development meant more money for Nigeria. “Funding the budget has been a source of concern in view of the downward trend in the price of crude oil. However, the anxieties of the Federal Government have been removed following the increase in oil production from about 1.9 million bpd to 2.1 million bpd. Besides, there will be incremental oil production from existing oil fields following the peace in the Niger Delta. This means more money for the country.

    “The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said some oil blocks were not only renewed, but would help in providing $2 billion for the country,” he said.

    According to him, Nigeria needs to sustain the projects – Egina and other producing assets, adding that they will help in buoying the government’s purse for a longer period of time.

    “Why is Nigeria afraid of not being able to finance its fiscal projects now that the country’s loss has been compensated by the coming on stream of the new deepwater field?” he asked.

    On  Organisation of Petroleum Exporting Countries’ (OPEC’s) cut, Ihetu said it would be wrong for Nigeria to limit production, since OPEC has not issued any directive in that regard.

    He said the fall in crude oil price was affecting every oil producing nation, adding that Nigeria is making up for the loss in price by getting more oil from critical assets such as Egina and the fields, whose licences are being renewed.

    He urged the Federal Governmen, to provide infrastructure required to boost gas production, stressing that increased gas production is crucial for economic development.

  • $16bn Egina probe: Senate warns against sabotage

    The Senate has asked foreign firms investing in Nigeria to desist from any activities that will shortchange the country and its people in their investment drive.

    Chairman, Senate Committee on Local Content Senator Solomon Adeola (Lagos West) gave the advice  at the weekend when Managing Director of SAIPEM Contracting Nigeria Limited Mr. Guido D’ Aloisio appeared before the investigative committee with  the firm’s legal counsel, Chief Henry Ajumogobia (SAN).

    A statement by the Media Adviser to Adeola, Chief Kayode Odunaro in Abuja said the senator spoke at the ongoing Senate investigation into the cost variations and local content elements of the $16 Billion Egina Deep-sea Oil production.

    It quoted Adeola to have said: “No individual or corporate body should stampede us as a country to do what is not obtainable in their country or in accordance to international best practices.”

    Adeola was also said to have added that it was because investment in the country was profitable that foreign investors make huge investment as in the case of Egina project.

    The statement said SAIPEM Contracting Nigeria Limited MD appeared before the committee with the firm’s legal counsel to explained that he was in the best position with the” Power of Attorney” to provide answers to the Senate Committee on behalf of the managing directors of three foreign companies – SAIPEM SA, SAIPEM Portugal and SAIPEM BV – all part of a consortium that got $2.9 billion – varied to $3.2 billion – contract of the Egina $16 billion project.

    It explained that Senate had earlier given an ultimatum for the managing directors to appear before its investigative committee in person.

    The statement added that on D’Aloisio explanation that he was in the best position to provide all evidences requested by the committee as the contract was signed by proxy and the foreign MDs may not know some details, Adeola said that the “Power of Attorney” document be submitted.

    It said that Adeola insisted that “all documents relating to the foreign firms aspects of the contract, including scope of work, approved variations, dollar-naira differentials in contracts as well as the shares of each of the companies in the consortium should be submitted to the committee.

    The senator said: “While we are not accusing anyone of shady deals and nobody is on trial, we insist that all relevant documents be made available to the committee so that we can present a fair and comprehensive report to the Senate for it to take decision to protect Nigeria’s interest and Nigerians. As it is, we have uncovered huge variations running up to a billion dollars as well as serial contraventions of the Nigeria Local Content Law 2010.”

    Calling on the media not to draw any conclusion of wrongdoings in their coverage of the committee’s proceedings as complained by the legal counsel of SAPIEM, Ajumogobia (SAN), Adeola noted that the reportage by the media must have been done in line of their duty to protect the interest of Nigeria.

    Chairman of the committee was also said to have directed the managing director of Samsung Heavy Industry (SHI) Mr. EJ Shin to provide evidence to justify his claims of taking away Nigeria jobs abroad from a Nigerian company, EWT Nigeria Limited, on the basis of late delivery and quality, a claim denied by the Nigerian firm present at the hearing.

    Adeola said an interim report of the findings of the committee so far will be submitted to Senate in plenary in about two weeks’ time.

  • 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.

  • $16b Egina field eyes 3000 jobs, 200,000 bpd

    Egina oil field that was discovered by Total Upstream Nigeria Limited (TUPNI),  is expected to create 3,000 jobs in five years.

    The project which is due for completion next year would also add 200,000 barrels of crude per day (bpd) to Nigeria’s oil production which is approximately 10 per cent of the country’s total oil output.

    The oil field located some 200 kilometres south of Port Harcourt, was discovered in 2003.

    The field is being developed by Total Upstream Nigeria Limited in partnership with the Nigerian National Petroleum Corporation (NNPC), CNOOC, SAPETRO and PETROBRAS.

    Its management yesterday said the project is expected to be completed with the initial budget of $16 billion.

    The statement read: “The floating, production, storage and offloading unit (FSPO) for the project has started its journey to Nigeria. Egina is the first major deepwater development project after the Nigerian Oil & Gas Industry Content Development (NOGICD) Act was enacted in 2010 and has the highest level of local content of any such project in Nigeria.”

    It said apart from job creation, the project is also expected to fabricate 60,000 tons of equipment in Nigeria, stating that Egina’s FSPO, which is designed to process oil and gas from the field, would berth at the quayside in Nigeria for integration of locally fabricated modules.

    This development is “the first for Nigeria,” the statement indicated.

  • Saipem nears completion of Egina FPSO project

    Saipem Contracting Nigeria Limited (SNCL) has completed the fabrication of some components of the floating production, storage and offloading (FPSO) vessel for the Egina field operated by Total Exploration and Production Nigeria Limited.

    The completion of Umbilicals, Flowlines, Risers (UFR) works by Saipem further confirmed that the 200,000 barrels per day capacity floating vessel would be ready for use next year. The contract was awarded to Saipem in 2013.

    Egina field located in Oil Mining Lease (OML) 130 is slated to begin production next year, and the FPSO is scheduled to arrive in Nigeria in April 2017 from the Samsung Heavy Industries fabrication yard in Korea. The cost of the FPSO is estimated at $3.3 billion.

    Speaking at the load out ceremony of the Umbilicals, Flowlines, Risers held at Saipem yard, Rumuolumeni, Rivers State, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr. Maikanti Baru, commended Saipem for doing majority of the engineering and fabrication work of the UFR project in Nigeria, particularly the fabrication aspect that was carried out at Saipem’s yard.

    “Millions of man-hours were expended on this project, new local vendors and sub-contractors emerged, an appreciable number of young engineers (75) have been trained, artisanal skills have been improved and new skills sets have been developed by way of the Egina UFR project,” Baru said, stressing that the feat would be replicated on a larger scale in similar new projects expected to come on stream in the near future.

    The NNPC chief, said: “I am aware that the Egina UFR component involves the engineering, procurement, construction, installation and commissioning of 52km of oil production and water injection flow lines, 12 flexible jumpers, 2km of oil export line, 20km of gas export pipelines alongside the installation and commissioning of 80Km of steel tube umbilicals and mooring of the FPSO and offshore Oil Loading Terminal (OLT) buoy. The local scope includes 6.3 million man-hours or 90 per cent of the entire package without Lost Time Injuries (LTI), 15,514 tonnes of fabrication (86 per cent of the package) and other procurement scope.

    “I recall that Saipem also handled the UFR modules for both Usan and Akpo fields, which are currently in production. I have full confidence that the lessons learnt in the execution of both Usan and Akpo UFR and recent technological advances have been incorporated in the Egina UFR,” he said.

    The Managing Director of Saipem Contracting Nigeria Limited, Guido D’Aloisio said he was pleased to see the firm reach the point  of load out of the UFR, adding the project consumed 14 million man-hours without Lost Time Injury (LTI).

    The Managing Director and Chief Executive Officer of Total, Nicholas Terraz, said the UFR project was tangible indication that the company was moving towards its target of delivering the project.

    He said the Egina project was the largest oil and gas project ongoing in Nigeria. “Egina UFR project is a project of record setting, together with all our contractors we say that it is a project with the highest Nigerian content, technology transfer and capacity development involving the fabrication of over 60,000 tonnes of equipment,” he said.

    The Executive Secretary, Nigerian Content Development & Monitoring Board NCDMB, Simbi Wabote who was represented Mr. Daziba Patrick Obah, expressed delight with the level and quality of job done, saying they were made possible by policies fashioned by the NCDMB.

    The Chairman, House of Representative Committee on Local Content, Emmanuel Ekon, said he was satisfied with Saipem because Nigerians undertook the sophisticated welding jobs in the firm.

  • Nigerdock delivers Total’s Egina FPSO’s first fabricated structures

    Nigerdock delivers Total’s Egina FPSO’s first fabricated structures

    Nigerdock said it has completed the fabrication and sail away of the ‘Flare Tower’ for the  Egina Floating Production, storage and offloading (FPSO) project for Total Exploration and Production Nigeria Limited (TEPNL).

    The FPSO is being developed for deployment in the Egina oil field, located 150km off the coast of Nigeria. The field is currently under development, and production is scheduled to begin in 2018. Nigerdock was selected by Samsung/Total for critical in-country fabrication works and training services as the provider of choice.

    The Flare Tower structure that weighs 732 tonnes was completed on time, loaded out and sailed away on March 24, the company said. It is one of a number of structures fabricated by Nigerdock at its fabrication yard on Snake Island Integrated Free Zone for Samsung Heavy Industries Egina FPSO project. The remaining works will continue through to the first quarter of 2017 as contracted.

    The Project Manager, Emeka Uhara, said: “The fabrication for Egina was a big success being delivered on time and within budget, and to world class specifications. ‘’We have expended over 1.7 million man-hours on the project, and it has helped generate employment for hundreds of Nigerians while also creating the opportunity for the provision of thousands of man-hours of specialised training.”

    The structures completed at Nigerdock’s fabrication yard at Snake Island Integrated Free Zone, Lagos, are a major boost to the Federal Government’s Nigerian Content policy, which seeks to domesticate more oil and gas activities in Nigeria under the guidance of the Nigerian Content Development and Monitoring Board (NCDMB).

  • Samsung hires Nexans for Egina FPSO cables

    Samsung hires Nexans for Egina FPSO cables

    Samsung Heavy Industries has contracted Nexans to supply more than 2,200 kilometres of power, instrumentation and control cables for Total’s Egina FPSO offshore Nigeria.

    According to Nexans, the cables are designed to prevent gas leakages, making them much safer for use in flammable or high-risk environments. This means that the project is able to comply with local fire safety regulations and meet the IEC standards and Bureau Veritas certificate, Offshore said..

    The Executive Vice President Middle East, Russia & Africa Global Oil & Gas activities, Benjamin Fitoussi said: “Nexans is incredibly proud to have been selected as cables supplier for this ambitious project. The contract with SHI is our largest FPSO contract to date.”

    The FPSO is 330 metres (1,083 ft) in length, 61 metres (200 ft) across, and 34 metres (112 ft) high, with a storage capacity of 2.3 million barrels (mmbbl) of oil.

    The Egina oil field is located 150km off the coast of Nigeria. The field is being developed by Total Upstream Nigeria (24 per cent) in partnership with CNOOC (45 per cent), Sapetro (15 per cent) and Petrobras (16 per cent). Egina is the third deep offshore development of Total in Nigeria. The field is currently under development and the production is scheduled to begin by the end of 2017.

    Located about 20km away from Akpo field, Egina field lies within the block Oil Mining Lease (OML) 130 and covers an area of around 500 square miles. It is situated at a water depth of up to 1,750metres.

  • Controversy trails Samsung’s Egina FPSO contract

    The alleged $300 million cost variation requested by Samsung Heavy Industries (SHI), the major contractor handling the floating production storage and offloading (FPSO) vessel, which will be used to produce oil from the French oil giant, Total’s Egina deepwater field located in oil mining lease (OML) 130, is getting more controversial.

    Contract for the FPSO was awarded in March 2013, about three years behind when it was supposed to be awarded. After it was awarded in 2013, following some disagreements with some sub-contractors, the project couldn’t be started till a few months ago.

    The cost of the project was $3.3 billion but as a result of the delay, Samsung submitted variation cost (increase) of over $300 million. The information filtered into public domain, which Samsung denied during the ground breaking ceremony in Lagos to mark the commencement of the project. A General Manager in Samsung Heavy Industries, Nigeria Operations, Mr. Frank Ejizu while fielding questions from reporters at the event, said the company didn’t submit variation cost of $300 million and that there was no alteration in the vessel’s design.

    However, investigation, showed that Samsung submitted request for cost variation in a 98-page letter addressed to Total with reference number EGN-10-KSMG-AEMG-LET-00671, dated September 23, 2014 and signed by the project director, J.R. Chung.

    The variation order request submitted by Samsung covers detailed engineering, impact on procurement and construction, expense for fast track and cost due to schedule Impact.

    It was learnt that the previous detailed engineering for the FPSO which was subcontracted to Worley Parsons Consortium, was altered by Total and Samsung said that under Article 22.1, the contractor should be compensated for engineering cost impact suffered due to Total’s initiated change orders.

    Samsung also noted that Article 15.8 under which the contract was awarded, also provides that the contractor should be compensated “for additional cost incurred in trying to mitigate the effect of adverse actions on work time schedule.”

    Samsung also made claims on cost expense due to schedule impact, noting that it “brings this claim for cost of schedule impact pursuant to Article 15.5(a)(b)(i) as a result of Total’s default in complying with Article 6.4 and Article 14.4.2-3, which is the default in timely clarification by Total impacting on the cost and work schedule on the contract, in addition to other factors affecting the project delay.”