Key dynamics revolutionising Nigerian local content took centerstage at Total’s Egina FPSO

By Ndubuisi Micheal Obineme

The Total’s Egina FPSO project is being undertaken by Korea-based Samsung Heavy Industries (SHI), with LADOL acting as the local content partner.

Total began the drilling program on the Egina field in December 2014. This intense project will keep two rigs busy for a total of 3,000 days. Five out of the planned 44 subsea wells have already been drilled, at water depths of between 1,400 m and 1,700 m, and 13 more will be completed when the field comes on stream.

The FPSO, operated by Total, is 330 meters in length, 61 meters across and 34 meters high, with a storage capacity of 2.3 million barrels of oil. Located some 130 km off the coast of Nigeria at
water depths of more than 1,500 metres, the Egina oil field is one of our most ambitious ultra-deep offshore projects.

The capital expenditure (Capex) for the six packages in the oilfield development is $16 billion, out of which $3.3 billion is earmarked for building the FPSO. The Egina FPSO is not the first FPSO to be deployed in Nigeria’s oil and gas industry as the country currently has fourteen FPSOs all built in foreign yards.

Out of these fourteen FPSOs, five were built for giant deep offshore oil fields – Shell’s Bonga, ExxonMobil’s Erha, Chevron’s Agbami and Total’s Akpo and Usan fields, all located several kilometres offshore, in water depths ranging from 200 metres to 1.2 kilometre. The uniqueness of the Egina FPSO lies in the fact that apart from being the largest FPSO in Nigeria, it will also be the first FPSO to be fabricated and integrated locally in Nigeria, and across the African continent.

Managing Director/Chief Executive Officer Total upstream companies in Nigeria, Mr. Nicolas Terraz, said that the Egina FPSO would boost the country’s daily oil production by 200,000 barrels from 2018. The additional barrels would come from the company’s multi-billion dollar Egina Field Development.

“The company is at present along the value chain from upstream to the downstream sector where Total is a leader, with close to 550 service stations across the length and breadth of Nigeria. In the last five years, the Total Group has invested US$10 billion in the Nigerian oil and gas sector. Today, we have expertise and strong positions in the onshore, offshore and deep offshore. The industry was facing a shakeout, as oil price is still low, and the economy is recovering from recession,” Mr. Nicolas said

Jean-Michel Guy, Executive General Manager of the Egina project, said that the Egina FPSO is one of the deepest offshore projects ever operated by Total. He adds: “Egina is a flagship project for Total, and
it is above all a Nigerian project. At Total, our commitment to our host countries is one of the keys to our success. We have taken up the ambitious challenge of playing a role in sustainable developing the
local industrial fabric by bringing together international companies and local contractors. The idea is to accelerate the pace of technology transfer by training Nigerian employees (over 410,000 hours in all).
This win-win situation should enable Total and Nigeria to productively pursue a partnership that began more than 50 years ago,” Jean-Michel said.

The Deputy Managing Director of Total E&P in charge of Deepwater District, Mr. Ahmadu-Kida Musa has also said that Egina was the company’s next deepwater field in development phase after the
discovery in 2003 and the signing of the Final Investment Decision (FID) in 2013.

Mr. Ahmadu further explained that the company’s target is to produce 200,000 barrels per day of crude oil from the Egina by 2018. He said the development of Egina by Total and the Nigerian National
Petroleum Corporation (NNPC) at a critical time when most other companies were not willing to invest was a demonstration of Total’s boldness.

According to him, for Total to embark on such $16 billion project when other companies were not willing, showed the company was confident in Nigeria’s operating environment. Mr. Ahmadu had also
stated that a lot of the fabrication work for Egina field, which is located two kilometers into the waters, had been completed bySaipem, Nestoil, Nigerdock, Dorman Long and Aveon.

Major driver for fabrication and integration of Egina FPSO:
Total’s Egina FPSO project is under the Nigerian local content regulations, and a portion of the topsides fabrication and integration is to be completed in Nigeria. And, the remaining topside module
integration and commissioning will take place in Nigeria for scheduled delivery in the second half of 2018.

All the FPSOs operating in Nigeria’s oil and gas industry currently were built and integrated in foreign yards, denying Nigeria the huge benefits of growing her Gross Domestic Product (GDP) through incountry domiciliation of the huge expenditure, and local capacity development, as well as job creation.
But with the signing into law, the Nigerian Oil and Gas Industry Content Development (NOGICD) Act on April 22, 2010 by former

President Goodluck Jonathan, the law mandated the Nigerian Content Development and Monitoring Board (NCDMB) to deepen the participation of Nigerians and Nigerian facilities in the oil and gas industry, by facilitating local capacity development and ensuring that the execution of large components of any project is domiciled in-country.

The law empowers NCDMB to maximise local participation in the oil and gas industry as part of the efforts to build local manpower and facilities, curb capital flight and create job opportunities for Nigerians in the industry. NCDMB not only insisted that any future integration of FPSOs must be carried
out locally, the agency also directed that a large fabrication scope of FPSO project must be performed in Nigeria.

FPSO fabrication and integration yard:

The Nigerian Content Act had led to increased indigenous asset ownership, particularly marine vessels, in-country fabrication and manufacturing capabilities, as well as local human capital development. The country had lacked facilities for integration of FPSOs before Total awarded the Egina FPSO contract to
SHI.

In order to carry out the local fabrication and integration of the Egina FPSO as required by Total, and the NCDMB, Samsung Heavy industries surveyed local facilities, but eventually Samsung decided to build a new fabrication and integration yard with $300 million of investment to keep the international
standard level of quality and safety, within Tarkwa Bay LADOL Free zone which was virgin land mass.

The investment led to the creation of an independent entity, Samsung Yard (SHI-MCI FZE) in LADOL Freezone Tarkwa Bay.

The local fabrication and integration of the Egina FPSO will boost technology transfer and the development of indigenous manpower and facilities, as evidenced in the construction of the Samsung Yard and the training of Nigerian technicians, engineers and other professionals by SHI. The yard has already provided 1,200 employment opportunities in the areas of welding, fitting and other support services; while the cascade effect outside the yard will generate huge jobs over the coming years.

The Local Fabrication and Integration of the Egina FPSO in Samsung yard has helped Nigerians to build more local capacity in increasingly challenging skills. By executing these jobs locally, the funds that could have left the shores of Nigeria for financing the fabrication in foreign yards are retained in the
Nigerian economy.

Apart from Nigerians acquiring new skills set in the oil and gas sector, the execution of the project locally also contributed to Nigeria’s GDP. Being the first fabrication and integration facility in Africa, the Samsung Yard (SHI-MCI FZE) will position Nigeria to become the hub of oil and gas business and
shipbuilding in the continent as all future FPSOs in the Gulf of Guinea will be fabricated and integrated in Nigeria.

During the arrival, the FPSO will be moored at the Total operated Egina oil field, located some 130 km off the coast of Nigeria at water depths of more than 1,500 meters. Apart from the FPSO, infrastructure on the field will consist of an oil offloading terminal, and subsea production systems that will include 52 kilometers of oil and water injection flowlines, 12 flexible jumpers, 20 kilometers of gas export pipelines, 80 kilometers of umbilicals, and subsea manifolds.

SHI has now completed delivery of three massive offshore projects which are: the Ichthys CPF, the world’s largest floating gas processing facility, delivered in April and Prelude FLNG, the world’s largest FLNG, left Geoje in June and the Total’s Egina FPSO which is heading to Nigeria.

According to SHI’s report, the giant FPSO has sailed away from its Geoje shipyard on Tuesday, October 31, heading to Nigeria. It will take three months for it to reach Nigeria in the second half of 2018.

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