Nigeria’s Agbami oil field development to cost $ 3.5 bn

Feb 28, 2005 01:00 AM

US oil firm, ChevronTexaco and its partners in the Agbami deep offshore oil field, will spend a total of $ 3.5 bn to develop the huge field. The General Manager, Government and Public Affairs of ChevronTexaco Nigeria, told that Nigerian local firms will be required to execute a total of N 13 bn worth of contracts in the total project package.
Chevron's other partners are the Nigerian National Petroleum Corporation (NNPC), indigenous oil company Famfa Oil and Brazil's Petrobras.

The partners signed agreements for the award of a $ 1.1 bn contract for the construction of the floating, production, storage and offloading (FPSO) vessel for the Agbami deep offshore oil field. Construction of the FPSO, which will handle the storage and exports of about 250,000 bpd of crude oil and 450 mm cfpd of gas, will be handled by South Korea's Daewoo Shipping and Maritime Engineering (DSME).
In line with Federal Government's directive on the project, 300,000 man-hours or 40 % of the total man-hours that will be spent in constructing the vessel, have been allocated to Nigerian companies, representing a major shift in execution of major Nigerian oil and gas contracts, especially in the deep offshore. Also, the partners have earmarked 7,000 tons of fabrication of the entire FPSO to be carried out in the country, compared to an average of between 500 and 1,500 tons in the previous deep offshore projects.

A consortium of 10 local engineering design outfits will involved in the FPSO construction. The consortium will be led by the Nigerian Engineering and Technical Company (NETCO), a subsidiary of the NNPC, which is expected to handle a minimum of 175,000 man-hours of the total reserved for the locals. Others are Deltek, Point Engineering, Ove Arup, Crestville, Linkso, Cakasa Engineering, Titan, Chestermead, OOP Engineering and Generolle Systems.
Local content was always going to be a major issue in the execution of the Agbami field development project, where the Federal Government had seen it a test case for its local content drive. The NNPC, which holds 50 % interest in the field, had directed that Chevron, the operator, should ensure 45 % Nigerian content.

The Group Managing Director of NNPC, Engineer Funsho Kupolokun who described the local content provision in the Agbami Development Project as "significantly more than has been done on any deepwater project in the country," urged Daewoo Shipping to improve further on local content package by providing opportunities for Nigerdock to bid for the main process packages to provide the required challenges for growth.
According to Kupolokun, the selected scope for Nigerian participation was still limited to fabrication of platforms, suction piles and booms, which are still of the low end of engineering, Nigerdock had already been granted approval to set up an Export Free Zone around its ship building yard on Snake Island, Lagos, with plans already ongoing to inject substantial funds to make the yard capable of fully integrating the FPSO topsides in Nigeria.

The Federal Government has set a target of achieving 45 % local content in the oil sector by 2006 and 70 % by 2010, up from the present level of about 15 %. Managing Director of ChevronTexaco Nigeria, Mr Jay Prior, also said that the partners would use the execution of the project to showcase more of its core values include high local content development, safety, environmental stewardship and community engagement.
Agbami field, lies in block OPL 216, ranks among the largest single discoveries in deepwater in the West Africa sub-region, with a structure spanning an area of 45,000 acres. The field was discovered in 1998 with reserves estimated at over 800 mm barrels.

Source: This Day
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