Egina FPSO violates Local Content on welding, fabrication - Marine Engineers

Abiola Seun |

The Nigerian Institute of Marine Engineers and Naval Architects (NIMENA) has said that the Egina Floating Production Storage Offloading (FPSO) fell short of the Nigerian Oil and Industry Content Development Act (NOGICD) signed into law in 2010 on fabrication and welding.

Speaking at the 8th Annual Conference and General Meeting with the theme: “Local Content in Nigerian Maritime Industry: Policies, Implementation, Challenges and prospects,” organised by NIMENA in Lagos over the weekend, the Institute’s Chairman, Engr. Henry Unuigbe said that section of the Act emphasises the need for all entities engaged in the Nigeria oil and gas industry to ensure that all fabrication and welding activities are carried out in the country.

He lamented: “This was not so in the case of Egina as part of the project was executed in South Korea. It is noted that a key facility in the construction of project of that kind, a suitable shipyard, is lacking in Nigeria. Whereas section 47 and 48 of the same Act require making regulation and giving tax incentives to encourage investment in local facilities, we are yet to see how that has helped to grow local shipbuilding capacity.”

“For Nigeria to maximise the benefit from such huge projects, emphasis must be placed on encouraging the development of shipbuilding yards large enough to accommodate the construction of facilities like FPSO and other large vessels. The economic value chain such investment will provide for Nigeria is better imagined.”

While commending the Government and the Nigerian Content Development and Monitoring Board for their efforts, he added that a lot still needs to be done to ensure that the full benefit of the NOGICD Act is achieved.

Speaking further, he noted, “that the Cabotage Act 2003 is another legal instrument meant to encourage capacity building, this time, in the maritime industry. While we are not oblivious of the efforts being made to deliver on some of the expectations of the maritime community, I think there is a lot to be done to improve local capacity.”

He also stated that every country that has embraced Local Content concept is no doubt enjoying the prosperity that accompany such laudable initiative.

According to him, the economy of such countries is controlled by their citizens and their wealth kept within their borders. He said NIMENA would continue to play its role in taking the industry to the next level.

He further urged members of NIMENA to be prepared to take advantage of the opportunities the Executive Order 5 signed by President Muhammadu Buhari on February 5, 2019 with a view to improving local content in public procurement that has science, engineering and technology components in it.

On his part, the NCDMB Executive Secretary, Simbi Wabote represented by Mr. Adewale Adenugba, said the agency was looking at how vessel maintenance could be in Nigeria, instead of sailing to other countries, including near-by Ghana or farther away and back.

On incentives for local investment, he said the agency was collaborating with stakeholders to ensure that oil contracts for local vessels are scaled up to about five years, which will enable ship financing and acquisition, rather than the current situation where such contracts barely run for two years.

He further disclosed that all the low voltage cables used in the building of Total’s Egina FPSO were exported from Nigeria to South Korea, as part of local content requirements, because they are superior to the South Korean cables.

According to him, more of such value chain addition would have come to the country if the infrastructure for large vessel construction were available in Nigeria.