JADESIMI: LADOL WILL BE CATALYST FOR NIGERIA’ S INDUSTRIAL IS AT I ON
up for two things. First of all, to take care of Onne and also do import and export of oil and gas. The important thing is that the Onne oil and gas Free Zones has been attempting to interlope on the activities of NEPZA rather than their own statutory authority and they have the objectives that they were set up to perform and they should get on with it and not seek to interfere with other free zones that has been set up by a separate authority and in many cases they have invested in many decades and have been growing with the active support of NEPZA.
So, the success of a place like Niger Dock, LADOL and others that are under NEPZA is due to the impact of NEPZA because they have not only been supervising us, they have been advising us, supporting us, assisting us especially on how we can better relate with other government agencies. In any event, in the case of LADOL, we are not an oil and gas free zone by any stretch of imagination even from what you saw when you came during the arrival of Egina FPSO does it look like an oil and gas free zone. Like I said, it is a ship building and the modules fabricated are industrial base of fabrication and you don’t build FPSOs every day. So, we didn’t set up our facility to fabricate just FPSOs and indeed we are into other industrial applications, which has been our mission from the very first day.
Equally importantly, Onne oil and gas Free Zone has essentially completely dominated (monopolised) the industry. There was a monopoly in this business until very recently. The cost to Nigeria of the monopoly is certainly in billions because in the first place, the offshore logistic business was never tendered for bid until recently. What that meant was extremely high pricing. What is worst is that other investors were completely shut out of the business and the industry did not grow as it should and could. It is now finally growing because people can freely come, get your certification and you do your legitimate business.
There was a time when the effective cost of the oil and gas industry of a monopoly pricing was something like $5, you can imagine that to the price of every barrel of oil. Fortunately under the current administration, the President and Commander in Chief of the Arm Forces, Muhammadu Buhari took a decisive action to end the monopoly, open up the space for everybody to come in.
For the first time ever, the offshore logistic business is being tendered for bidding. It is almost unbelievable that there was no tender, there was no bid until now. The space is open up for every player to try their luck. If you have invested, you should be supported equally and all that. I have to say that in Nigeria, we have laws, regulations, however, what is even more important is the implementation of these rules and it is very fortunate that the current leadership of the NPA, the current Managing Director is an extremely patriotic and brave Nigerian that has implemented these policies. This simply means freedom for everybody to compete on a level playing field and you will already see that as we speak, many Nigerians who were not even able to dare to do business in their father land have finally taken the bold step to invest. Nigerians are not lazy people, we just need an enabling environment and government support that’s all. We need a truly enabling environment and as we speak, many more others are gearing up because what we are hoping for is that there will be many more LADOLs. It will take many more LADOLs to take Nigeria to where we are going and all we’ve done is to pioneer and show what can be done. We started with the largest piece of offshore facility and that demonstrate that there is nothing that cannot be achieved by Nigerians once we have the level playing field.
What is the current level of the integration of the Egina FPSO?
In terms of progress of integration, the FPSO has been here for a couple of weeks, there are lots of preliminary technical arrangements that have to be made before the lifting. Essentially, these modules that a on the quayside would eventually be lifted and integrated into the FPSO. So, I would imagine that we are still at the preliminary stages of doing that. In terms of how realistic six months is, six months figure is not just a figure picked up out of nowhere. Total is the lead owner of the FPSO and they have people in South Korea, they have people in LADOL monitoring the level of integration.
Actually, we were ready to integrate about three months ahead of time but there were some delays in the FPSO main construction in South Korea before it got here. So, we had plenty of time to complete the modules and to ready to integrate. The expectation from Total base on their intimate knowledge of what the work program is going to be is that six months should be adequate to install the modules and complete the integration.
How much will LADOL base save Nigeria in terms of capital flight?
I can look into the figures and give you later, but the significance of the integration is that we now have the capacity which we didn’t have before now in Nigeria which is to do integration. It is like you build a school and you are now training students and someone is asking you how much it cost to build the school which is equally important but far more important is that you have built a world class school and you have countless people come through and acquire skills. How do you put a figure to that?
As supposed to the fact that you do not have this facility and you are forever flowing out billions of dollars elsewhere. So, the way I would love to look at it is that in terms of the actual cost, I would say value for money. The upside for Nigeria is countless. There will be more fabrications done in Nigeria, there will be training, human capacity development and equally importantly, we can expect inflow of more billions of dollars because before there was skepticism but currently all doubts have been cleared. The construction of the yard was done in record time such that we were waiting for three months for the FPSO to arrive.
As far as I can see, it is clear that the success achieved by LADOL is a huge significance that would lead to even more significant achievement because now you have many more Nigerians, investors coming into various aspect not just offshore but in engineering, designing and I hope eventually maybe not in the not too distance future, we will have the beginning of an iron and steel company. This is because all the steel we are fabricating are imported, and now that there is high local demand for steel, I’m sure this will have an impact on investors looking more seriously into production of the iron and steel. Even though we are in the information age, in my own view an iron and steel industry remains the back bone of Industrialisation even though information technology is already huge and it is growing quickly but at the end of the day you will have to produce things. You must produce cars, and all manner of things. So, that is one area where it is a big step forward in terms of facilitating an iron and steel industry because we now have high demand for it.
We understand you have plans to invest in Power generation, tell us about this
We are looking into different aspects of the power business including turbines for example and importantly into the LNG gas market. There are various schemes where you can have LNG barge come to LADOL and re-gasified for power production. Already we have a few generators that are powered by CNG and this is an aspect of power that we can surely contribute to. When the LNG comes, it is re-gasified, put into CNG and that will fill generators domestically or maybe for small industry. The potential of power development is almost endless same as transportation.
We have a huge railway program in Nigeria but the steels and the rail tracks are imported. Our own message in LADOL is to encourage other people because we need as many people as possible, getting on the train of value addition locally, industrialisation locally.
While some will do it by example when they see that things can be done in Nigeria, they will be encouraged. I believe in the potentials of Nigerians especially young Nigerians.
They are very brilliant and capable, but they need an enabling environment, government support, consistent policy.
When will LADOL’s training Academy kick off?
It is going to happen this year. We have had some activities in the last couple of years. For example, we have started building the power plant that is gas fired which will be 50MW but the first phase of 28MW is already on the way, so, we have been busy. However, because of the significance of this school of technology, we have finalised our plans to break ground any time from now and hope to complete it this calendar year.
Aside power generation, we heard that LADOL is partnering with American embassy on auto manufacturing. How visible is the project?
We thought of the possibility of doing something with Ford. If and when that sees the light of the day, it will be a joint venture that would required LADOL to make some investment.
Why is LADOL doing all this?
It is because some 20 years ago, I recognised that to have a LADOL type of entity will be critical for Nigeria. I also knew that there is absolutely no way any so call foreign investor would come to Nigeria and be concerned essentially with areas to fast track Nigeria development. That was the main driver however, I didn’t expect the level and depth of the monopoly and the unremitting nature of their opposition. I knew that if we did not do the break through, there will be many others that will take it up. Making a difference is also part of it.