Nigeria needs $20bn yearly investment to become regional hub, says LADOL boss

For Nigeria to become the hub for oil and gas exploration in the West African sub-region, an annual investment worth $20 billion is required to grow the market and make it more competitive, says Amy Jadesimi, managing director of Lagos Deep Offshore Logistics base (LADOL), at the just concluded Offshore Technology Conference (OTC), held in Houston, United States of America (USA).

Presenting a paper tagged, “Driving Economic Growth through Indigenous Private Sector Investment in Nigeria,” Jadesimi, who was one of the keynote speakers selected in recognition of LADOL’s effort in reducing the cost of offshore (drilling and production) logistics support in Nigeria by 50 percent, said that the future of logistics support, oil and gas exploration business in Nigeria is bright, if the current hurdles that stunt growth are overcome.

“The industry is targeting production levels of 3 million barrels of oil and 10 million standard cubic foot (SCF) of gas per day. And with this huge market potential, Nigeria should naturally be the most attractive oil and gas investment destination in the world,” she stated.

Listing the hurdles that must be overcome, she said that “there is need to end the long contracting cycle, the foreign controlled private monopoly strangling the industry and encourage greater collaboration among Nigerians in the public and private sectors.

Jadesimi, who commended President Muhammadu Buhari for fighting corruption and the private foreign controlled monopoly in oil and gas logistics services recalled that just in March this year, President Buhari endorsed LADOL for taking a lead role in the implementation of Real Nigerian Content and for making strategic investments in critical infrastructure, which not only created thousands of jobs but also built a haven for International Oil Companies (IOCs) in West Africa.

She noted, “Total Upstream Nigeria Limited (Total) has also shown faith in the firm, by investing in the development of an onshore integration in LADOL with its FPSO platform valued at $3.8billion.

“This will be the first in the sub- Saharan Africa and is a real game changer. Total must be commended for the foresight it has shown in making such a strong commitment to local content and driving the industry down a path that will lead to sustained job creation and improved working environment for IOCs,” she added.

On long tender cycle, she said the government has reduced the cycle to six months, which is still too long compared to other neighboring countries. “To reassure investors it is achievable, we would like to see concrete and detailed plans on how six months, or even less, can be achieved.”

To Jadesimi, cost reduction is another issue that must be addressed owing to the fact that the industry had maintained an expensive foreign controlled monopoly in the provision of oil and gas logistics in the past and that “kills our chances of growing the market and attracting new investors.”

LADOL, she said, is currently playing a prominent role in the entire value chain, particularly in the areas of cost reduction and job creation. “Cutting costs also makes investors decisions easier and quicker. This is because low cost solutions make business plans viable while word class facilities like LADOL make it possible for them to compete globally.”

“We also expect that our example will encourage investment in other new facilities because we need more facilities and to create clusters all over the country. LADOL’s ship building yard was built in less than one year, so new investors can use that as a benchmark to know how easy it is to build in Nigeria,” she added.

While commending the National Assembly for supporting the industry through laws like the Local Content Act 2010, she states that Nigeria has some good laws that need to be fully enforced, such as the Local Content Act.

Uzoamaka Anagor-Ewuzie & CHIGOZIE EGWUATU