‘For Nigeria to develop, we need indigenous private sector people to build facilities’
Amy Jadesimi, is the managing director of Lagos Deep Offshore Logistics Base (LADOL), a Local Content partner to the Korean-based Samsung Heavy Industries (SHI) in the building of a $3.8 billion Egina Floating, Production, Supply and Offloading (FPSO) oil platform. Few weeks back, Nigerian delegation comprising of representatives from Total, NCDMB, NEPZA, and LADOL visited the SHI shipyard in Korea, where a part of the vessel is being built before it would finally sail to LADOL base in Lagos to be integrated. JADESIMI In this interview with AMAKA ANAGOR-EWUZIE shared her experiences and lessons for Nigeria.
You just returned from Korea on a visit to Samsung Heavy Industry (SHI) to see the Egina FPSO. What is the latest on the project?
The chairman of LADOL and one of our executive directors, Ibrahim Aliyu visited the Samsung yard, where the Egina FPSO is being built before it sails to Nigeria. It is a huge vessel of 380 meters long and 70 meters wide, which is the height of a full skyscraper. It will be sailing to Nigeria shortly and would be the largest vessel to ever berth at a quay-side in West Africa. This would mark a transition for Nigeria from a situation where our local content capacity were limited, job creation was inconsistent and we are suffering from shortage of dollar and crude revenue, to the beginning of an era where Nigeria is taken seriously as a developer, a fabricator and an engineering hub for West Africa and the world.
By mid this year, the FPSO would be here. What significant benefits would this have for Nigeria?
Our President, Muhammadu Buhari, will be the first African President to stand on the deck of FPSO, a massive vessel and partially integrate it for the first time. It is a milestone, but what does it mean in terms of the economy and job creation? By estimation, it will create about 50,000 direct and indirect jobs, and will attract $10 billion worth of new investment into the maritime and fabrication sectors because having this vessel, shows the world that Nigeria is a place where the largest and most complex projects can be done.
It is a game changer because it took a very long time to get to this point. LADOL started in 2001 and we have had many ups and down. At a critical moment even in this project we were seriously in a danger of the yard not being built until when the oil company Total, who owns the FPSO stepped in to make sure that the right thing was done.
We also thank the Nigerian Content Development and Monitoring Board (NCDMB) because of the Local Content Act and without the NCDMB insisting that this facility be built as part of the Egina project; we wouldn’t be here today. The executive secretary of NCDMB, Simbi Kesiye Wabote has continued to support LADOL through Funds and by saying that the same facility where the FPSO is going to berth must be used for future projects.
The arrival of the FPSO will show that private sector in Nigeria and abroad can create positive change in Nigeria. We want a situation where Nigeria will be making long-term investment in infrastructure and this will be one of the catalysts for that investment to come.
In a nutshell, the arrival of FPSO over the next decade could result in having a development hub, increase in Local Content from 10-15 percent to 70 percent. This would be a huge milestone for the NCMDB, Total, Nigeria Export Processing Zone Authority (NEPZA) and Nigeria as a country.
What lessons are there for Nigeria/Africa in SHI Korea fabrication yard?
The important thing to learn from South Korea, Japan, Singapore and China, is the role that the indigenous people play in developing their countries. These were countries that suffered horrible wars in the last century. They started from the basis and have managed to build massive infrastructure. They had international help for sure but that help came into the system they had developed. China is mostly driven by the public sector but the others were private sector driven. When you compare this with the situation in Nigeria/West Africa, you can see that the missing ingredient is the private sector.
So, the lessons learnt is that for Nigeria to develop, we need the indigenous private sector to build facilities, sit at the table with the public sector and negotiate with international companies and institutions. To me, the strategic area now is the one that has multiplier effect in job creation such that once the facilities are built and people are trained, for every one job created, two or more would be created in the general economy.
How would you describe the collaboration between LADOL, Total and SHI in the Egina project?
The project is owned by a consortium of oil and gas companies but is being managed by Total. So, the Egina bloc would be operated by Total and is their responsibility to develop the FPSO and all the other components required to produce oil and gas from the bloc. This is the third project that Total would be undertaken in the last seven years. They decided to put their faith in LADOL because they saw that LADOL has the stamina, financial capability and the will to develop this yard and make sure that going forward, it will be used for future projects.
For Total and other oil and gas companies to get the benefit from this facility, we have to make sure we build the required human capital, develop Nigerian team, get the technological transfer and ensure that the yard will be a facility to be use for future projects because it will lower cost.
How has LADOL, as a player in the oil and gas industry, benefited from the Local Content Act of 2010?
The Local Content Development Act has been enormously important to LADOL and the whole industry. Before the passing of the Act, LADOL has already invested almost a $100 million building ahead of the market. At that time, we were still fighting to establish the fact that Nigerians can provide logistics support. The passing of the Act and the way the NCDMB implemented it took us from a situation where Local Content was a-nice to have to a-must have.
The shipyard in LADOL is the single largest Local Content capacity development in Nigeria’s history. Hopefully, it will not be the largest for long as we hope that the projects that are coming up would lead to more capacity development across the country. We now have capacity to carry out fabrication and engineering jobs locally and if you put both together, you get what I call the ‘Real Local Content,’ which lowers the cost of doing business.
How would you assess Asia-Africa relationship when compared with Europe/US-Africa?
Comparing the relationship African countries have with Asia with that of Europe and America would be a very interesting poet. Historically, our relationship with Europe was us being their colonies, and after that era, the expropriation of our wealth continued politically rather than military expropriation.
We do not have that history with Asia. If we look at the way Asian countries approach Africa, it is a lot more transparent, which is based on trade that could be win-win. I think it will help in influencing European approach in Africa. Sustainable Development Goals (SDGs) emphasises the need to create neutral prosperity when engaged in bilateral trade. Although the Asian countries might not have done that effectively but they now respect policies that support local content and creates neutral prosperity by developing the markets in Africa for the goods in China. These were things Europe and America are just catching on to now.
As a company that is thinking global and acting local, what is your take on the changing dynamics of Nigeria/Africa influence from Asia in the oil and gas sector?
The principle factor here is what is happening locally. If we want to change our fate as Nigeria, we have to make sure that we make the strategic investment necessary to build and own infrastructure. Develop our people and have equipment that enables large projects to be done locally for value addition. Therefore, when international companies come to Nigeria and into a fully develop facility created by Nigerians; it will enable an equal partnership for exchange of ideas and information.
The problem we were having historically was that foreign companies were coming, setting the role and they all have their facilities back home. Naturally, they will prefer to take the contract from Nigeria back home and even if you force them to build here, they will build a poor structure that will only last till they finish their project.