ChevronTexaco further promotes Nigerian local engineering centres
ChevronTexaco continues to emphasize development of local engineering expertise and technology-transfer efforts as it
pursues several major oil and gas projects in Nigeria. For the past two decades, ChevronTexaco has awarded contracts
for work on its projects to world-class engineering companies in collaboration with indigenous companies in Nigeria.
The country currently has no local-content requirements, making it difficult for indigenous engineering talent to get
a foothold on the local market.
Company officials consider such joint-venture collaboration and technology-transfer programs as key to developing a
domestic engineering capability in Nigeria's oil and gas sector. The longer-term goal is to establish high-quality,
low-cost engineering centres to serve West Africa and other markets.
In 1962, predecessor Gulf Oil had demonstrated its commitment to developing indigenous expertise by creating an
educational grant program in Nigeria. The Nigerian Petroleum Development and Trust Fund (PTDF) was established in
1973 as an offshoot of the grant program, which was later absorbed by the PTDF.
With the West Africa gas pipeline, Escravos gas gathering and liquids fractionation (EGP) Phase 3 gas utilization
scheme, and a gas-to-liquids plant, as well as Agbami oil field development, under way and a goal of zero flaring of
natural gas by 2008, ChevronTexaco is in the process of qualifying three or four engineering companies for tenders or
contract work orders to execute "in-country" engineering projects.
Ideally, these companies would work in join ventures with internationally recognized engineering firms. ChevronTexaco
was expected to make initial contract awards, based on commercial terms, at yearend 2003.
Aside from the major projects, to encourage the development of in-country engineering capacity, smaller projects
aggregating a total value of $ 150 mm will be awarded as community development projects to design and build schools,
clinics, and other local facilities. To date, 16 suchcontracts have been awarded recently to small local companies,
which ChevronTexaco hopes to nurture to a level where they could execute bigger, more challenging projects.
ChevronTexaco's Nigerian "in country" engineering initiative has evolved over the past decade. Initially, the
company's engineering design office in Escravos has been staffed mainly by employees with Zurich-based engineering
giant ABB Group, since 1992. Following the construction phase of EGP Phase 1, that office has focused on 26 offshore
platform upgrades.
The Escravos office also supports small-facilities engineering projects and drilling programs. Subsequently,
ChevronTexaco, ABB, and local company NETCO entered into a partnership in which NETCO personnel would work alongside
ABB staff to engage in less-complicated engineering projects. This 3 year contract was to end in 2002 but was
extended another year to allow NETCO to better make the transition into its own engineering services contracts.
Under a third stage, the program calls for a comprehensive strategy to ensure that domestic engineering experience is
developed via
1) provision of in-house support staff to complement local contractor resources,
2) a flexible and creative contracting policy,
3) brainstorming sessions to implement the best ideas, and
4) encouraging development of local engineering contractors with enough capacity to succeed.
ChevronTexaco staff engineer Lanre Alabi recently ticked off the pluses and minuses for efforts to develop a robust
engineering capability in Nigeria.
Among the pluses are world-class gas and deepwater oil projects, comparatively cheap labour costs, wide support for
increased local content, established universities with potential to produce quality graduates, good interest by
international engineering firms, an internationally accepted open tender contracting process, and client companies
willing to "hold the hands" of service providers to overcome the learning curve.
Among the challenges are experience of less than 5 years for most local engineering design firms; a lack of adequate infrastructure; a dearth of veteran professionals, leading to meagre institutional knowledge; insufficient understanding of "design liability" among local engineering firms; inability to guarantee base workload for contractors; shortcomings in the educational sector affecting quality of engineering graduates; a need to strengthen professional engineer accreditation oversight; insufficient collaboration among client companies, service providers, and educational institutions to align expectations with results; a daunting business climate in Nigeria that affects willingness of new foreign partners needed for technology transfer; and minimal investment in state-of-the-art training tools.