A Review of the Nigerian Energy Industry

NNPC to fully domestic procurement process

*NNPC Towers, Central Business District, Garki, Abuja.

Ike Amos

06 March 2018, Sweetcrude, Lagos —
The Nigerian National Petroleum Corporation, NNPC, Monday, stated that it plans to fully domesticate the procurement process to ensure that a substantial amount of big tickets projects are handled in-country.

Speaking at the 2018 Technology and Innovation Expo, organized by the Federal Ministry of Science and Technology in Abuja, Group Managing Director of the NNPC, Mr. Maikanti Baru, disclosed that the NNPC was already recording success in its local content drive in the Nigerian petroleum industry.

Baru, who was represented by the Chief Operating Officer in charge of Gas and Power at the NNPC, Mr. Saidu Mohammed said, “We have been trying to make sure that all project activities are domiciled in Nigeria. There was a time when even for tender documents, we had to go to London to prepare them.

“Today, we have fully domesticated the engineering aspect of it. We have collaboration with the Nigerian Content Development Management Board, NCDMB; we have also gone ahead to get Nigerians who are innovative, to invest and who are willing to propel this country, going forward, to go into the venture of fabrication.

“In other words, what we want to do is to make sure that we also domesticate the big chunk of where we spend the money, which is the procurement aspect. And we have gone far in that regard. Today, there are fabrication going on in areas of valve, in areas line pipes; we have even gone into fabricating vessels here in Nigeria today.”

Baru noted that engineering and technology is the bedrock of the work of the oil and gas industry, while he added that the NNPC would continue to support all sorts of innovation, whether it is in the upstream, midstream or downstream sectors of the petroleum industry.

He said, “We have also been innovative in our areas of work to make sure we bring down the cost. And again, many Nigerians do not know that we started the Nigerian Content drive at the NNPC. The drive of the Nigerian Content agenda for us was to bring down the cost, and we have successfully done so. We have brought down of production of a barrel of oil today, to about a neighbourhood of $20 per barrel. Our target is to bring it down below $15 and we would continue to march forward towards that.”

Baru also stated that foreign contractors involved in the construction of the $2.8 billion Abuja-Kaduna-Kano (AKK) pipeline project would be required to build pipe mills in Nigeria.

He clarified that the contractors in the project had been told that importation of line pipes would not be allowed until all the capacity of existing pipe mills in the country is filled.

He said, “First of all the engineering is domiciled here, no doubt about that. When you come to the procurement of big projects like the Abuja-Kaduna-Kano Pipeline, the main input is the line pipes. What we have done to drive the Nigerian Content agenda to make sure that until we fill the capacity of the existing mills in Nigeria we cannot import line pipes.

“Those who are coming to build this pipeline has it in mind that at the end of the day, they may have to come with their mills together, to manufacture the line pipes right there. And for the other area of services, Nigeria has already achieved a lot. We are in the construction. Majorly, Nigerians construct the line pipes and Nigerians do all the pre-commissioning and commissioning services. Nigerians are also there in the maintenance in gas pipelines because we are going there and we are marching forward.”

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