Nigeria Generates Over $180bn Revenue From Deepwater Operations

Nigeria’s deepwater 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.

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. 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 Offshore Technology Conference (OTC) in Houston, Texas.

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

Dr. 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 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,” Dr. Baru informed.

According to him, 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 wide range of training and maintenance services to the industry locally.

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

He said that the development implied 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 that Nigeria needed the right caliber of technical and engineering skills and manpower.

“At my last count, about 10 deepwater projects are lined up for sanctioning. Also, given the lead time for project maturation, the time to build is now for us to achieve the results we desire, seizing the chance to develop our oil and gas industry and by extension the economy,” Baru said.

He noted that there were 87 deepwater blocks in Nigeria, out of which only sevem are producing and additional six at different phases of development, adding that more than half of the blocks in deepwater Nigeria are open.

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