16 August 2016, Lagos – Shell Nigeria Exploration and Production Company (SNEPCo) achieved significant savings in the cost of subsea equipment through an initiative which has seen the refurbishment of five Subsea Trees in-country led by Nigerian engineers, thus setting a new record in the federal government’s local content policy in the oil and gas industry.
The Nigerian Oil and Gas Industry Content Development Act of 2010 seeks to domesticate a large chunk of oil and gas industry jobs within Nigeria to build local capacity and capability, curb capital flight and boost the country’s economy.
A Subsea Tree is an arrangement of valves and other components installed at the wellhead to control and monitor crude oil and gas production and injection flow.
SNEPCo embarked on a Tree Refurbishment initiative in 2013 to ensure timely delivery of the equipment at lower cost for the Bonga Phase 2 project, which comprises drilling and hook-up of in-field wells within Bonga.
The Managing Director of SNEPCo, Mr. Bayo Ojulari said in a statement at the weekend that apart from saving costs, his company embarked on the local refurbishment to help local engineers to acquire skills
“Beyond cost consideration, we were also looking to indigenise the know-how so that Nigerian engineers can acquire the necessary skills. We are pleased with this success story. The first Subsea Tree under the programme was installed on schedule in May 2015. This was the first of its kind re-using a Subsea Tree fully stripped down and refurbished locally in Nigeria, with all of its original functionality restored,” said Ojulari.
SNEPCo saves about $6 million for every refurbished Subsea Tree, and this is delivered within 15 months as against 36 months for newly manufactured ones.
SNEPCo’s Engineering Manager in charge of Subsea and Pipelines, Mr. ‘Debo Oladunjoye, who led the refurbishment team described the scope of work to entail “the retrieval of Subsea Trees for disassembly, repair and rebuild following procedures developed by the Original Equipment Manufacturer (OEM) to international standards and codes”.
“The work is done at the OEM/SNEPCo logistics base at Onne in Rivers State with Nigerian engineers and technicians playing key roles. The expenditure on this work in Nigeria aligns with the cost of similar Subsea Tree refurbishment in Europe. We are currently refurbishing three Subsea Trees,” Oladunoye added.
SNEPCo helped to create the first generation of Nigerian deep water professionals through the Bonga project which started production in 2005, as Nigeria’s first deep water oil and gas production project in more than 1,000 metres of water.
To sustain production and keep the Bonga Floating Production Storage Offloading (FPSO) vessel full, additional in-field wells have been delivered as part of the Bonga Phases 2, 3 and Bonga North West projects, all producing through the Bonga FPSO.
SNEPCo operates Bonga field on behalf of the Nigerian National Petroleum Corporation (NNPC) in partnership with Esso Exploration and Production (Deepwater Ltd)–Exxon, Total E&P Nigeria Ltd – Total and Nigerian Agip Exploration Ltd – ENI.