Jadesimi: LADOL Will Be Catalyst for Nigeria’s Industrialisation

The Executive Chairman, Lagos Deep Offshore Logistics Base, Mr. Ladipopo Jadesimi, in this interview with Eromosele Abiodun, spoke on how the Egina FPSO is a game changer for Nigeria

Recently you recorded a first with the arrival of the Egina FPSO, the obvious question now is the future of Lagos Deep Offshore Logistics Base (LADOL) Free Zone after this achievement

We hope that in six months’ time, the Egina FPSO will leave LADOL and go to the Egina oil field offshore. I think it is 150 kilometers offshore Nigeria and it will be there for 30 years producing oil. What we are set out to do from the very beginning (which is almost 18 years now) is the development of an industrial free zone. For example, the FPSO is essentially a vessel and what is currently going on is the completion of the vessel, a specialised vessel but it is ship building. We can build vessel for any purpose and this FPSO is a vessel that will be utilised in the production of offshore oil but the facility you saw when the vessel arrived is basically a ship yard. There are many other FPSOs in the pipeline and one of the most significant aspect that has now happened in Nigeria is that there are few FPSOs and there are FPSOs that have been working in Nigeria for the last decades but in every single instance, they were completed somewhere abroad and brought only as far as the offshore field where it is going to do its business without touching Nigeria and that meant several things. All the investment going into the building of the vessel was spent outside Nigeria and you all know what that means if that remain perpetually the case.

The major reason for that was because there was no determined political will on the part of Nigeria to ensure that these investments in offshore field that are in the tens of billions of dollars to see how these investments can be capture. In order to do so, you need a suitable facility to be able to accommodate these things.

When we started 17 years ago, this was one of our objectives to build an industrial base that will be capable of handling the very largest of offshore structure, not just offshore but other industries too. As it happened, today the Egina is the largest FPSO in the world.

To answer your question more explicitly, if there are other FPSOs that are in the pipeline, integration of the FPSO can be done in-country because currently, no FPSO can justifiably be integrated outside Nigeria as we have the facility and it can be done and it is being done. So, there is a prospect of more fabrications and integrations of FPSO to be done in Nigeria. However, as I said earlier our facility is basically a ship yard and the fabrication part of the facility can fabricate anything. So, it is not only FPSO related fabrication that can be done there. Part of our immediate plans includes going into the power sector, turbines for example, go into transportation, go into Agro-business. Like I said from the onset, our objective was the creation of an industrial free zone.

Something else is important because I mentioned the development of human capital which is a very important aspect Nigeria needs to do. We expect before the end of the year to launch our technical school that will train hundreds of Nigerians in various skills such as engineering, wielding, fabrication and these skills will be applicable across board in terms of industrialisation.

As we all know, the Dangote Group is building a refinery and a petrochemical complex in Lekki. This is going to require trained man-power. Nigeria can never have remotely enough trained man-power for industrial growth. So, just to sum it up, the facility is there to be involved in all kind of fabrication work. FPSO don’t get built everyday so, you cannot build a facility just to do fabrication for an FPSO which comes every few years, but the key thing is that no FPSO will be integrated outside Nigeria anymore and in fact starting with Egina.

The FPSO is just one aspect of the project which is under $4 billion, the total investment for that field to come to first oil is $16 billion. The depth of the Egina oilfield is something like 100 and half kilometers. So, there is a lot of subsea structures at the bottom of the sea needs to be done that will together bring the oil, flow the oil and eventually send the oil up to the FPSO. There will essentially be some purifying because there will be some water, gas and all that. So, the oil will go through the modules and go purely to the storage part. So, there is huge amount of work to be done including drilling. If you can imagine drilling of that depth, I am more than impressed by the technology and there are all kinds of subsea structures that will be used. The idea is to increasingly domesticate more and more of the investment aspect of the offshore oil and gas exploration and production.

The advantage any country that has oil and gas particularly oil and gas reserves is not the eventual sale of crude like we have in Nigeria which NNPC has certain equity amount of crude and there is petroleum profit tax and all that but in my view, that is the least of the advantages to be gained in oil and gas. The main advantage is to develop capacity to participate in the investment phase because by doing so, it willlead toindustrialisation when you start doing fabrication, engineering, wielding. This applicable across every single industry you can think of.

What are the implications of the arrival of Egina FPSO to Nigeria’s economy?

Yes, that is what I have been trying to expatiate on. The implication can be summed up as a complete game changer. The game changer in that Nigeria is finally beginning to reap the main benefits of having oil and, domesticate investments in the industry.

It is clear that if you have an FPSO of $3.3 billion that is built elsewhere, all that money goes out or the potential investment goes out or the potential employment goes out, it is clear that what you need is to reverse it. In the Middle East, for example, Saudi Arabia and other countries, they saw this a long time ago and you should go to Abu-Dhabi in particularly you will see huge industrial packs that are dedicated to all kinds of fabrication and other hardware that goes into the oil and gas business.

So, the implication is that we have finally started on the part of increasing domestication of investment which will mean employment, which will mean training opportunity which in my view is highly important because if you train a wielder, those of them that are entrepreneurs will end up setting their own business somewhere, some may end up working in North Sea or Angola etc. As it is being said, rather than give a man fish, you can teach him how to fish and that is the way to potential independence.

That is why the significance cannot be over emphasised because there was skepticism four years ago about having a facility like this being built in Nigeria. Like is said earlier, there is no reason any FPSO should be integrated outside Nigeria. When you talk about integration it means modules been fabricated and the fabrication was not done only in LADOL, it was done right across the country from Niger Dock, to Warri, to Port Harcourt and without a facility to integrate, there will be no demand for these fabrications. Since we have the facility, others will do the fabrication then the employment opportunity will spread across Nigeria.

What is the relationship between Free Zones and regulatory agencies like NPA, NEPZA, NCDMB, and OGFZA?

That is a very good point because there may have been some confusion perhaps deliberately so in the minds of the public. Now, LADOL and other free zones were licensed by NEPZA as industrial free zones and all our programmes in our case since 2001 investments were based on the clear regulatory authority of NEPZA that has thus far supervised us very successfully. There is another free zone authority named Onne Oil and Gas Free Zone Authority but as the law stands now, that authority was set