• Tuesday, July 23, 2024
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Fresh concern mounts over quest to monopolise oil/gas fabrication, logistics businesses

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The recent investment growth in the Nigerian oil and gas fabrication and logistics businesses, which currently stood at over $1.7 billion, is under a serious threat as industry operators have raised concern over an alleged move to monopolise the business by a single operator.

Industry close watchers believe that the monopoly of such business will go a long way to not only jeopardise the Federal Government’s Local Content policy, but will also result to the extinction of $1.7 billion investments made by other competitors. This will also result to massive job loss as thousands of Nigerian engineers, welders and others, who are currently employed in these fabrication yards, are pushed back to the labour market for job search.

Findings reveal that the $1.7 billion invested in fabrication yards and logistics bases in the South West is spread across the Nigerdock Fabrication Yard and dry dock facility located at Snake Island in Lagos. Its chairman, Anwar Jarmakani, recently confirmed that the company had in the past three years attracted over $230 million direct investment, making the company’s investment total to over $1.7 billion.

Also, Kaztec Engineering, located at the same Snake Island in Lagos, also recently invested about $100 million, while Eko Support Oil and Gas Logistics base in Apapa Port was completed in 2014, at a cost of over $124 million.

Other establishments include Digisteel Integrated Services Limited, a wholly Nigeria company, which recently commenced work on a $100 million fabrication yard at Ogogoro Island, as well as Lagos Deep Offshore Logistics base (LADOL), which invested over $500 million in the first phase of the development of its facility and recently commenced the construction of its Egina Floating, Production, Supply and Offloading (FPSO) facility worth over $3.8 billion in partnership with the Samsung Heavy Industry (SHI) of South Korea.

Close sources disclose that the fresh pressure allegedly coming from a Rivers State-based oil and gas company is aimed at limiting the oil and gas related businesses to its establishment in Onne, Rivers State, to the detriment of its competitors in the South Western parts of the country, who have invested over $1.7 billion in their various businesses.

This move, industry close watchers say, contradicts the provisions of Local Content Act 2010, and seeks to take over the powers of the Ministry of Petroleum, which has recently gained positive international recognition for the successful Local Content implementation in Nigeria.

In a petition allegedly being pushed by the promoters of the Onne Port-based company, the company is said to be “urging President Goodluck Jonathan to close down facilities in Lagos, and make Onne Port that is controlled by one company, the exclusive location in which all Nigeria’s oil and gas projects will be handled.”

According to sources close to government, the petition that also seeks to pressure the Nigerian Ports Authority (NPA) into supporting the monopoly agenda, was sent to the Presidency through the Ministry of Transport, and it requests the president to “direct all the relevant agencies including the Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) to ensure that only Onne Port is used for oil and gas fabrication and logistics.”

It would be recalled that late President Musa Yar’ Adua had on several occasions turned down the alleged requests made by the promoters of Onne Port and instead ordered that such monopoly must not be allowed in the operations of the nation’s oil and gas projects.

If monopoly is allowed, according to industry stakeholders, it will further reduce the recent ranking of Nigeria’s oil and gas sector by Organisation of Petroleum Exporting Countries (OPEC) as the lowest contributor to the country’s Gross Domestic Product (GDP). They believe that Local Content is key to Nigeria’s future and therefore urged the government to continue its good work in the area of using Local Content to grow indigenous participation in oil and gas businesses.

“The ongoing efforts by the government to rank Nigeria in the G20 World Economic Powers will be a mirage if foreign investment drive is put at jeopardy due to the closure of facilities in the South West,” stakeholders warn.