NNPC urges Oil Companies to Collaborate

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Companies in the oil and sector in Nigeria are urged to collaborate to over challenges facing the industry

By Anayo Ezugwu  |  Mar 6, 2017 @ 01:00 GMT  |

THE Nigerian National Petroleum Corporation, NNPC, has urged oil and gas companies in Nigeria to collaborate to ensure efficient and even development of the sector.

At the West African International Petroleum Exhibition and Conference, WAIPEC, in Lagos, Maikanti Baru, group managing director, NNPC, said collaboration is the only way out of the situation the industry is in today.

Baru, who was represented by Siky Aliyu, managing director, National Engineering and Technical Company, NETCO, “In order to ensure survival of local businesses and build-up capacity within the limited opportunities available, companies have become innovative by forming synergies to weather the storm of ever growing, and stiffer international competition from international companies. This paradigm shift is certainly required pending when the industry will once again ride to the crest of activity level.”

According to him, a case study of a success story of collaboration was the Detailed Engineering Design, DED, of the Topside of TUPNI’s Egina FPSO project delivered safely, on time and within budget by a consortium of Nigerian Engineering companies led by NETCO. He said the project is a good example of successful collaboration and capacity development.

Baru noted that no engineering project of this magnitude has been handled locally because no single local company had the capacity to do so.

“The Management of NNPC in its wisdom approved for three local companies to collaborate and support the local execution of this project. This decision paid-off and has placed on record that over 80 percent of the associated man-hours which was in excess of 1 million man-hours on a single project can be effectively executed in one project location in Nigeria.

“The achievements associated with this included, first of its Kind In-country Consortium arrangement; successfully delivered, safely, on schedule and within budget; consortium achieved zero LTI during the execution; domiciliation of engineering in-country; achieved NCDMB goals of 80 percent NC by recording about 1 million man-hours out of which 90 percent of it were carried out by Nigerians; showcase resilience of Nigerian Engineering Companies; on the job training to grow capacity in-country and contribution to Gross Domestic Product, GDP.”

With the successes of local content in the sector, Baru said indigenous oil and gas companies’ needs to collaborate to improve their capacities. “It is said, that in any business you only get what you negotiate not what you deserve”, and off-course good negotiations are done from position of strength.

“Thus is now imperative that Nigerian companies should consider collaboration and synergy to grow from being the boys to become the men, work cooperatively together, demonstrate greater capacities which will position them to take up opportunities reserved for the big foreign players. The key to successful collaboration is to set shared goals, agree on rules of engagement at the onset and play by the rules to achieve a successful outcome.

In his presentation titled ‘Service company – operator collaboration models – drawing on experience from other oil provinces,’ Bayo Ojulari, managing director, Shell Nigeria Exploration and Production Company, SNEPCo, said the federal government needs to collaborate with the service companies across the world to execute world-class projects in the country.

He advised the NNPC to understudy Brazil and Malaysia model in order to improve the sector. He said unless the authorities collaborate and create room for collaboration among operators the sector will not move forward. Ojulari acknowledge the efforts of the NNPC but said that more needed to be done in the sector.

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