Osinbajo: Success of $16bn Egina Project, Proof of FG’s Commitment to Economy

•  More foreign investment in Floating Production Storage coming

By Eromosele Abiodun

Osinbajo also expressed the hope that the successful delivery of the project will attract more investments in the country, particularly in the area of FPSOs.

He stated this yesterday, when he paid a working visit to the Lagos Deep Offshore Logistics Base (LADOL).

LADOL is currently playing host to the fabrication of the $16 billion oil and gas logistics service facility commonly known as the FPSO rig, otherwise called the Egina project.

The project, which has been applauded as the first -of- its- kind in the sub-Saharan Africa is being handled by the Korea-based Samsung Heavy Industries (SHI) on behalf of Total Oil Exploration, withLADOL serving as its local content partner.

Osinbajo, who was elated at the progress recorded so far on the project, noted that the $16 billion so far invested in the Egina FPSO would have been held back because of an official refusing to grant approval owing to his financial interest.

He insisted that the Buhari-led administration has laid a “solid foundation for the Nigerian economy and the way he wants to see the Nigerian economy grow”, pointing out that the era of the president signing off on directive to the Central Bank of Nigeria (CBN) to move out large sums of money was over.

“The first is that we very strongly believe that the Nigerian economy must be private sector driven. This project for example is a $16 billion project in naira terms that is about N5 trillion. The entire Nigerian budget is about N9 trillion and our spending on infrastructure, which is the largest in the history of Nigeria, is N1.5 trillion. So it tells you that this project alone is several times more than the federal government spending on infrastructure. This is the story of developed economies; they are private sector driven, and there is no way that government’s revenue can possibly satisfy the demand”, he said.

According to Osinbajo, the federal government has successfully curbed grand corruption in the country, revealing that the next phase of the battle is the public service.

He added: “For us, it is not just about creating the right business environment but creating the right attitude. Part of it is corruption; part of it is just the graft that attends all of these kinds of activity. I was talking with someone last week on the fight against corruption in Nigeria and I said that so far what we have been able to do is to check grand corruption. Namely; just going to the treasury and taking money out of the treasury and sharing it. We have been able to stop that because you will not find the president signing off or asking the central bank to move out large sums of money. Every Nigerian knows that President Buhari will not do such a thing.

“And because we have been able to stop that corruption, we are investing, despite earning 60 per cent less revenue, almost five times more than the previous government on infrastructure. We have not even got to a point where we will be looking at public service and people doing all sorts of things, that is the next phase and that phase is important. This country can only work if we are able to deal with corruption. When people put their financial interest over what will benefit the entire nation, we are never going to be able to make progress. A project like this is able to be held up just because somebody is not granting approval.”

Furthermore, he said: “The second part is monopoly, it is a fact that monopoly will raise its head; every business man wants a monopoly. This has always been the struggle between government, regulators and operators. This is why the federal government’s policy has been one of trying to ensure that we do not permit monopoly, that we open up the space so that there will be competition. It is very obvious now that there is no monopoly, it is an important part of encouraging investment and of course making the environment much more lucrative for those who are doing business.”

Osinbajo noted that the Egina project was also a clear demonstration of government’s commitment to the local content policy.

He added: “With respect to Nigerian content, this is a very key area where the Egina project has excelled.  Very rightly, it has proved the point that we have made all along. The president has signed so far two Executive Orders on the issue of local content. Aside from the great work of the local content board, which is what brought the Egina project to fruition, the president has also signed two other executive orders: Executive Orders 3 and five emphasising the requirement that wherever local content is available, we will use local content.”

He said that the enabling business environment provided by the government, now spurs people to invest in the country, adding, “all the critical issues like getting licenses, getting contract signed are being worked on.”

The acting President praised the Managing Director of the Nigerian Ports Authority (NPA) for putting an end to monopoly in oil and gas logistics stressing that the cost benefits that has accrued to operators as a result, will lead to more investment in more FPSOs.

Earlier in his speech, Chairman of LADOL, Ladi Jadesimi, said that the company remains committed to its vision of creating employment for Nigerians and making the country and Africa hub for maritime fabrication.

He said the huddles encountered while nurturing the company were way beyond what was anticipated.

He said: “The completion of the topside of the largest FPSO in the Total fleet in the world is certainly a big milestone which has taken us a huge step forward on our journey towards achieving our vision and mission.”