Petroleum industry records milestone in local content

From a very humble beginning in the 1970s, indigenous oil and gas firms in Nigeria are making progress in an industry dominated by foreign firms. SOLA ADEBAYO reports their activities in boosting gas distribution in the country.

The International Oil Companies, IOCs such as Shell Petroleum Development Company Limited, Total E&P Limited, Mobil Producing Nigeria Unlimited and Nigerian Agip Oil Company have always been at the forefront of crude oil and natural gas exploration and production in the country. The multinationals also occupy prime place in refining, distribution and marketing of petroleum products as well as provide specialised services in the industry.

But with the passage of the nation’s Local Content Bill into law, many indigenous firms have been empowered to make positive impact in the industry than in the past. In other words, the Nigerian Content Development and Monitoring Board, NCDMB, which has the responsibility to implement the Act has succeeded in increasing indigenous participation in the oil and gas industry, build local capacity, create linkages to other sectors of the national economy and boost industry contributions to the growth of our National Gross Domestic Product.

For instance, Vandrezzer Energy Services Limited has completed the construction of a first-of-its-kind Wellhead Monopod Jacket in her IML-90 Field Development Project, which comprises the engineering designing, fabrication, construction and installation of a wellhead platform complete with jackets and a concrete-coated pipeline for some offshore operations.

The Managing Director of the firm, Mr. Joe Udofia remarked that, “I must promptly ascribe our astronomical growth to the Nigerian Content Development Initiative as a Federal Government policy established through the Nigerian Content Development and Monitoring Board to positively reposition our indigenous companies among which Vandrezzer is a leading brand.’’

Vandrezzer is not alone. Fenog Nigeria Limited, FNL is also involved. The firm blazed the trail when it deployed its two newly acquired PD 250 HDD rigs to fix a major component of the Escravos/Warri Gas Pipeline Project- Escravos River Crossing- initiated by the NNPC/Chevron Joint Venture. The HDD equipment successfully laid the pipes across the 1.7-kilometre Escravos River in Warri South West Local Government Area of Delta State, a novel achievement by an indigenous company in the nation’s oil industry.

Despite the challenges posed by the new technology and agitations by the host communities, a team of Fenog’s engineers and technicians delivered within three months. For the first time in the oil and gas industry, the PD 250 HDD technology successfully placed 24’’ pipes 42 metres under the water across the 1.7km across the river, from the entry point to the terminal point in Madagho, an Itsekiri community, Warri South West LGA of Delta State. The prevailing world record was 1.2-kilometre river crossing. For setting a new world record, the company received accolades in the industry.

But Fenog beat its own record in the first week of January, 2014 when with the aid of two HDD rigs-PD 250 and PD500, it set a new world record in the oil and gas sector with the gas pipelines project awarded to it by an oil major, Nigeria Agip Oil Company (NAOC).

Probably impressed by the performance of Fenog in the NNPC/Chevron’s job in the Escravos river crossing, the management of NAOC challenged Fenog to send gas pipelines across Kwale end to ObOb end of the river, a distance measuring 2.82 kilometres.

The trunkline project, designed to convey gas from the various fields of NAOC in Kwale and its environs, to ObOb Gas Station to Bonny plant of LNG and beyond, was awarded in February 2013. Fenog completed the job within six weeks despite the challenges posed by flood in the area in 2013. The company eventually gained access into the site on November 10 due to the flood menace.

The job was completed by December 30, 2013, with the pipes laid 33metres under the river from the entry point at Kwale to the exit point at ObOb across the turbulent river, with the combined forces of PD 250HDD rig and PD 500HDD rig. Speaking on the significance of the project while conducting journalists round the site in Kwale, Fenog’s General Manager, Engineer Chukwudi Uwakwe, said no company had been able to achieve the record, adding that with the NAOC’s Gas trunkline project completed, Fenog had recorded another first in the oil and gas sector.

Uwakwe said, “The significance of this project is that it is a trunkline to convey gas from Kwale flow station to ObOb Gas Plant and to Bonny LNG and beyond. So it is an economic value line that Agip has put in place to ensure that gas is convened from Kwale to ObOb Gas Station to LNG.

“We (Fenog) carry the flag of local content policy of the government because no company in Nigeria and even in the whole world can be able to do this kind of project for now. A 24-inch by 2.82 kilometres river crossing is a challenging work and Fenog is showing an example to all Nigerian companies that we have the capacity and we are equally encouraging them to come up and build capacity to train Nigerians because this job was done by Nigerians and it was 100 per cent done by Fenog Nigeria Limited.

“We are using this medium to tell the Federal Government to encourage local companies so that they can be able to come up with standards that can be able to promote the local content.”

However, Uwakwe seized the opportunity to appeal to the government to ensure fair treatment of the local players in the industry. “Let me use this opportunity to tell the Federal Government to consider the local companies first before their foreign counterparts in the scheme of things in the industry. That is my appeal to the Federal Government because if we work and execute a project, the money would be used to develop Nigeria but if foreign companies get contract they will only pay salaries but take the money to their countries.

“The local companies in Nigeria will develop Nigeria. If there is any project at all they should first consider Nigerian companies and this will help us to build capacity,” Uwakwe added.

To sustain Fenog’s innovative local content strides and place it ahead of other operators, Uwakwe said the management of the indigenous oil firm had acquired seven HDD rigs in the categories of PD 150, 250, 350 and 500 HDD rigs as well as an Offshore and Deep Water Barge (Akpevweoghene), with the capacity to lay pipes from 2” to 60” offshore/deepwater, among others.

The latest of the HDD technology acquired by the company, according to Uwakwe, is PD 350 HHD rig designed according to Fenog’s management specifications by the German manufacturers. In addition to its installed drilling capacity, Uwakwe said PD 350 HDD rig has other inherent values over PD500 HDD rig.

Elated about the acquisition of PD350 HDD rig, Uwakwe said, “PD350 HDD rig is different because we call it a Vasatile Rig. Apart from the normal drilling which every other rig can do, it is also used for pulling, pushing, thrust-boring, tunneling and it has the ability to grab and push and overcome any force.

“The operation of PD 350 HDD rig is all-encompassing. It is the first of its kind in the whole world. We (Fenog) told the manufacturers what they would do for us and they came up with it and it is the latest of the HDD technology,” Uwakwe added as he displayed the equipment.

The company’s huge investment in acquisition of latest technology, especially in pioneering underground pipe laying in the country, he said, was conceived to salvage the oil industry, particularly to assist and collaborate with the authorities to curtail the unwholesome acts of crude oil theft.

Describing the HDD as of “immensurable value” in the oil and gas sector, Uwakwe added, the acquisition of the equipments was the company’s contribution to the ongoing war against sabotage activities in the oil industry.

Also speaking about the giant strides achieved by Fenog, its Executive Director, Mr. Mathew Tonlagha, recalled how the company used the Continuous Horizontal Directional Drilling (CHDD) for one of their ongoing crude oil pipeline project within the Escravos region. He further stressed that this pipeline will be the most secured pipe line in Nigeria since the company deploys CHDD technology as a strategy.

Tonlagha said the disposition of the Minister of Petroleum Resources, Mrs. Deziani Alison-Madueke, rekindled the hopes of the local players in the industry. To this end, Tolangha expressed delight that the management of NAIC deemed it fit to patronise his establishment in line with the local content policy and urged other multi-nationals to emulate Agip.

Tolangha also acknowledged the support and encouragement of NAOC’s management and staff during the execution of the contract. Tonlagha said, “We are contributing our quota to the growth of the local content and we are not going to rest on our oars. We have just acquired PD 350 HDD rig, which brings our HDD rigs to seven. This is the first of its kind in the whole world because we gave the manufacturers specifications.

“We have just completed the project for Agip to take gas from Delta State to Rivers State with our HDD rigs within six weeks and that project is one of the biggest pipeline project that Agip has embarked upon to contribute to the optimal use of gas resources in the country.

“We are not getting a fair share yet as the leading Nigerian contractor in HDD by way of patronage but we are encouraged by the disposition and actions of the Hon. Minister of Petroleum, who came to Delta State to commission our offshore badge. That shows that there is hope because of the encouragement from the Hon. Minister of Petroleum. And that has sent signals to the oil companies that they need to give us jobs to sustain this drive.

“You know that the Local Content Bill was just approved by the Federal Government and it will take some time for people to get use to the policy. It is still a challenge but the way the Hon. Minister of Petroleum and NNPC are going about this policy shows that there is hope.

“What keeps our head above the water is the fact that we owned the equipment. Owning equipment is actually a success because a client will always want to give the job to someone who own equipment. And if you own equipment the task of executing the job is cheaper than when you go outside to rent the equipment. We are pleading to the IOCs, Shell, Chevron and the likes of them to encourage us because they are actually not encouraging us at all. We appreciate the action of the management of Agip for giving us the opportunity to serve and demonstrate our potentials and implore other oil multinational companies to emulate Agip.

“We also acknowledge and appreciate the support of the management and staff of Agip during the execution of the project and we want all oil multinationals to encourage us more to build capacity to help to build the Nigeria labour force because what the white man can do the black man can also do better,’’ he added.