EGINA UFR Project: NNPC Seeks NCDMB Collaboration to Shorten Contracting Cycle

Ernest Chinwo in Port Harcourt

Following the huge success recorded by Saipem Contracting Nigerian Limited (SNCL) on the Egina UFR project in terms of employment generation and Nigerian content development the Nigerian National Petroleum Corporation (NNPC) has called for more support and collaboration from the Nigeria Content Development and Monitoring Board (NCDMB) to shorten contracting cycle to six months.

Speaking at Egina UFR Load Out ceremony at Saipem yard, Rumuolumeni, Rivers State, the Group Managing Director of NNPC, Dr. Maikanti Baru, said the call was necessitated by the need to reduce cost and create more opportunities for similar feats achieved by Saipem on the Egina project.

The NNPC helmsman said, “Several initiatives have been introduced by NNPC management to reduce the tender cycle time. However, more interventions are still required to achieve world standards. We are continually refining our systems and processes to shorten our contracting cycle to six months from prequalification to award stage, as experience has shown that long tendering process is a major cost driver in the industry”.

He commended Saipem for doing majority of the engineering and fabrication work on the Egina 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 noted, 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 project- Egina Umbilicals, Flowlines, Risers, Offloading Systems and Offshore Works was awarded to Saipem in 2013 and located about 20km from producing Akpo field which lies within the Oil Mining Lease OML 130.

The field is situated in water depths of up to 1,750m and was discovered in 2003 by the Egina-1 exploratory well with current estimated oil reserve of 550million barrels of light oil with expected peak production rate of 200,000 barrels of oil per day into the Egina FPSO.

The GMD NNPC said: “I am aware that the Egina UFR component involves the Engineering, Procurement, Construction, Installation and Commissioning of 52 km 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. Your relentless and commendable effort at EPC-type projects is evidence of what we are celebrating today.”

Earlier in his address of welcome, Managing Director of Saipem Contracting Nigeria Limited (SCNL), Guido D’Aloisio, said he was pleased to see that after so much efforts put into this project “we are at this point (the load out ceremony) adding that another reason for his happiness was that the company was also celebrating 14-million manhours without Lost Time Injury (LTI).

“It is very important to us that we do our job and do it safely”, D’Aloisio stated, adding that the Egina UFR project is truly Nigerian project done in Nigeria. The fabrication was done in Nigeria, by Nigerians for Nigerians. I am proud of this project”, he enthused.

He added: “What we have achieved here is coming from very far. Since 1967 we’ve been part of the history of the oil industry and power in Nigeria,” and expressed appreciation to the government and people of Nigeria for hosting the company.

Managing Director & CEO Total E&P Nig. Ltd, Nicholas Terraz, in his remarks expressed great pride in the ceremony for according to him the UFR project is tangible indication that we are moving towards our target of delivering the project capacity.

He described the project as the largest oil and gas project ongoing in Nigeria and a welcome contribution to the Nigeria economy.

He said: “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 explained that the UFR project did not involve only fabrication but other aspects of activities in the oil and gas sector. He called for the need to keep in mind the global oil and gas environment are changing so demanding the Nigeria be more innovative to continue to optimise projects value without compromising safety and quality.

In his remarks, a member of the Nigerian Content Development & Monitoring Board NCDMB, Daziba Patrick Obah expressed delight with the level and quality of job done saying they were made possible by policies fashioned by the NCDMB.

Obah who represented the Executive Secretary of NCDMB, Simbi Wabote at the ceremony said that he was suspicious when Saipem, at an earlier inspection of the project, told members of the board, that the job was been undertaken majorly by Nigerians.

He said: “But on close monitoring we observed that the people doing the intricate welding processes and others were Nigerians even at some very intricate locations with some of the jobs done at up to 1,750m under water. I must commend Saipem for training Nigerians and entrusting them with the capacity to do this.”

Obah observed that Nigeria has tremendous capacity but lamented that what was lacking was adequate linkage. “We were pleasantly surprised that this quality of job is being done here by Nigerians. We can only request that it should be sustained and expanded,” he urged.

He described the project as another milestone for the Nigerian content development stride and a success of the genuine efforts to maximise local capacity, calling on multinationals to increase their investments in Nigeria and make in a services hub for oil and gas industry in the region.

Obah told Saipem: “This project is a very good story for NCDMB and Nigeria. We shall remember what you have done today and we shall work together.”

In an exclusive interview with THISDAY at the ceremony, Chairman House of Representative Committee on Local Content, Emmanuel Ekon, said he was very satisfied with Saipem stressing that that was also the position of his committee.

The member representing Abak/Etim Ekpo/Ika Federal Constituency in the Nigeria House of Representatives said: “The first time I came here about two months ago, I was very satisfied with the level of job that is going on here. Satisfied in the fact that Nigerians are the ones undertaking this very sophisticated welding that is going on in Saipem here.

“I have gone to several fabrication yards in Nigeria, especially those owned by foreigners. What I saw compared what I see here in Saipem is not anything compared to what we have here in Saipem and like I said my biggest joy is that my brothers and sister are the ones undertaking this sophisticated job here at Saipem yard.”

He commended the company for a job well done. “My impression is that Saipem has done very well in terms of capacity building in Nigeria; Saipem has done well in terms of relationship with host community, Saipem has done well in terms of empowering other Nigerian local companies; Saipem has done well in keeping fate with the Local Content Act of the Federal Republic of Nigeria. So for me, Saipem I believe is a good partner and I will at any point in time recommend government, NNPC and anybody that wishes to do business in Nigeria to consider Saipem”, he added.