Ms Diezani Alison Madueke minister of petroleum resources has directed the Nigerian Content Development & Monitoring Board to strike out a deal with operating oil and gas companies in the evaluation of existing machine shops, dock yards, fabrication yards and other facilities as part of the measure of upgrading them to industry standards.
She observed that current establishment of Longitudinal Submerge arc Welded pipe mill in Yenagoa by Yulong Steel and planed longitudinally welded steel Mill in Abeokuta by Vigeo Steel will create over 10,000 direct and ancillary jobs and retain USD 700 million in the Nigerian economy.
According to her, the projects will create 3,000 training opportunities as well as other benefits to the Nigerian economy when completed by 2014. The minister explained that other investors have also expressed interests to establish pipe mills in Nigeria and their efforts must be supported by government.
Ms Alison Madueke, who gave this directive recently when she led chief executives of international oil companies on a facility visit to SCC Pipe mill in Abuja, observed that many existing facilities were underutilized and could be harnessed at reduced costs to support industry operations locally.
She told the operatives to submit the recommendations from the evaluation to her office before July 2012. She commended the model used at SCC Pipe Mill whereby the facilities set up originally to manufacture water supply pipes were upgraded to service the Oil and Gas Industry. SCC first manufactured pipes for Exxon Mobil which was installed on the company's Edop facility offshore in 2011, thereafter opening the flood gates for current orders from Shell, Chevron and Agip.
She appealed to the firm to create awareness of its product to the oil and gas firms within Nigeria and abroad as part of the agenda to increase 350, from to 500 Nigerian workers.
She further explained that many other investors have also expressed interests to establish pipe mills in Nigeria and their efforts must be supported by government.
She said that "Our role as government is to create the conditions that will stimulate and sensitize these investors. Investments in a few more pipe mills will increase capacity and create local competition which will surely improve quality, operational efficiency and drive costs down in the medium to long term."
The minister is optimistic that the establishment of steel pipe mills in Nigeria is a viable venture given that the oil and gas industry demand is envisaged to grow to over a million metric ton per annum to serve the new field developments, Gas Master Plan and Gas Revolution Projects.
She said that "There will also be replacement of aging pipelines, brown field modifications, construction of new refineries and petrochemical plants which would require steel pipes."
She reiterated the commitment of President Goodluck Jonathan to the full implementation of the Nigerian Content Act and support for companies that invest in the establishment of targeted facilities where the Nigerian Content scope can be performed satisfactorily. She added that "Provisions of the Nigerian Content Act protect investments in facilities and disallow the industry from exporting work that can be done in country. Local facilities must be accorded first consideration in line with the principles of the act."
According to her, there is now a growing interest of original equipment manufacturers and investors to set up facilities in Nigeria while the market share of indigenous vessel owners had risen from less than USD 200 million in 2009 to USD 1 billion and local fabrication tonnage has also risen by 40% to 54,000 tonnes per annum over the same period.
Mr Madueke commended the chief executives of the operating companies and stakeholders of the industry for collaborating with the board and adhering to guidelines issued by the board, especially those relating to the domiciliation of equipment component manufacturing, expatriate quota management, utilization of indigenous marine vessels and indigenous rig ownership scheme.
(Sourced from www.momentng.com)
