Nigeria generates over $180bn in revenue from deepwater operations

BABAJIDE OKEOWO

Nigeria’s deep-water operations have generated revenue exceeding $180billion following industry players’ capital investment in excess of $65billion with the potentials for growth amidst untapped abundant opportunities in the sector.

The Group Managing Director, GMD of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, made this disclosure while delivering a paper entitled: “Deepwater Operations in Nigeria: The journey so far” at the Panel session of the Petroleum Technology Association of Nigeria (PETAN) in the ongoing golden anniversary of the Offshore Technology Conference (OTC) in Houston, Texas.

Baru, who was represented by the Chief Operating Officer, Upstream of the NNPC, Mallam Bello Rabiu, stated that Nigeria held approximately 13billion barrels of oil, out of which about 2billion has been produced with a huge volume yet untapped.

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Baru said Nigeria remained an active player relative to other regions in terms of deepwater development, stressing that the industry started with the deployment of the latest technology, a stride it has continued to maintain.

“Out of the 15 Floating Production Storage and Offloading (FPSO) in Nigeria, seven have been deployed for deepwater operations.  Nigeria ranks only behind Angola within the African deepwater operations in terms of FPSO deployment,” he said.

According to the GMD, the country has utilized each deepwater project as an avenue to upscale its unique human capital skills in different areas not limited to engineering design, project management, welding, and diving.

He added that the local content contribution or services share in deepwater had continued to grow and improve from the sub 1% level to an aggregate contribution of over 25%, from engineering man-hours of less than 20,000 to over 1.1million in recent Egina project.

“With the Nigerian content, tonnage has grown by 600% from the first deepwater project till date,” Baru noted.

The NNPC helmsman stated that deepwater projects had benefited the wider Nigerian economy by boosting demand for a range of goods and services, including offshore vessels and platforms, materials, floating hotels, helicopters, and manpower, creating jobs and providing a wide range of training and maintenance services to the industry locally.

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He added that services in areas such as manpower supply, logistics, and vessel supply, chemical supplies had more or less been domesticated in the deepwater value chain.

Baru, who averred that the recent further demonstration of this was the in-country topside integration on the Egina FPSO project, saying this had achieved the dual goal of both industrialisation and manpower development through job creation and skill acquisitions.

 “The gains enumerated in terms of production and reserve growth, revenue and value creation, manpower and technology development need to be sustained. I must reiterate that sustaining these gains means all hands must be on deck. We must leverage the expected growth in deepwater for national development. We expect within the next 10 years that production from Nigeria deepwater would double,” he posited.

He said that the development implied an increase in steel demand, as steel represents 20% to 35% of the overall cost for a new-build structure, dry docking, pipe coating, welding, and sundry ancillary services, adding that Nigeria needed the right caliber of technical and engineering skills and manpower.