…Delivers tangible benefits to people
Whereas most petroleum exploration and production companies in the country advance cost and risk as visible sacrifices for compliance to the Nigerian Oil and Gas Industry Development (NOGICD) Act 2010, key multinational players, ExxonMobil altered the traditional stereotype with a declaration that the policy is not just a moral obligation but also a good business strategy. Deputy Editor SOPURUCHI ONWUKA reports.
Nigeria’s key oil and gas producer, ExxonMobil declared that it has pumped billions of dollars into deliberate programmes that promote local capacity growth, infrastructural development, social services and growth of indigenous content in the nation’s petroleum industry.
The company also stated that it has continued to express faith in the country through massive investments in enduring petroleum industry infrastructure and, as well as audacious deep pocket funding outlay for exploration, development and sustainable accretive reserves and production growth.
The company explained that the programmes which predate the prevailing Nigerian Content Development policy of the government are built into its annual operations budgets to form part of carefully thought out strategies to deliver tangible benefits of its operations in the country to the people of Nigeria, especially from host Akwa Ibom State and host communities.
The Oracle Today reports that the position of the company on Nigerian Content policy might have explained the riddle about its smooth relationship and relative peace in its operations terrains despite the angry agitations that spur from neglect and deprivation in most oil producing communities in the Niger Delta.
It would be recalled that the evolution of oil industry in Nigeria altered the shape of activities in the communities that host key national petroleum assets including pipelines, export terminals and sundry upstream oil and gas production facilities operated by various multinational oil companies including Royal Dutch Shell, ExxonMobil, Chevron, Agip, and Total.
These communities host a criss-cross of oil production wells, flow stations, manifolds and pipelines operated by the oil firms.
Rising petroleum industry activities and growing production assets mean that the host communities had to concede lands and rivers, their natural sources of livelihood, to oil companies hoping that goodwill and patronage arising main and ancillary industry activities would spur rapid infrastructural development and accelerate rise in the standard of living.
For decades, however, the expectations of development for Niger Delta remained a mirage, and the people’s dreams turned to nightmares. Host community response to industry presence turned sour, and hostility gave expression to frustration. It is therefore simple to interpret the evolution of hostility to oil firms in the country as product of their failure to patronise their host communities.
In response to economic impact of restiveness in the Niger Delta, government has evolved a number of measures to address host community grievances. From the creation of Niger Delta Development Commission (NDDC), Ministry of Niger Delta Affairs, Niger Delta Amnesty Programme and others, none has taken more structured approach to sustainable economic outreach like the Nigerian Content Policy which compels operating companies to domicile execution of industry jobs in-country.
The policy which was crystallized into a legislative act in 2010 and enforced by the Nigerian Content Development and Monitoring Board (NCDMB) has been criticized by some multinational oil firms on the grounds of cost inefficiency, quality risks, dearth of skills and expertise, facility deficits et cetera.
However, at the 7th Practical Nigerian Content (PNC) seminar hosted in Uyo, Akwa Ibom State, Chairman and Managing Director of ExxonMobil affiliates in Nigeria, Mr. Paul McGrath, made it clear that his company considers local content not an option but a moral obligation that is also good for business.
His statement which was made in a public presentation altered industry perspective, shattered public stereotype on the multinational oil companies in the country and marked the much expected convergence in government-industry position on the need deploy the huge petroleum industry budget to stimulate domestic industrial growth, drive infrastructural development and build human capacity.
In providing details of the company’s inclusive orientation for the local operating environment, Mr. McGrath pointed at few numbers that strongly show that the nation’s offshore champion is not only supporting the government’s annual fiscal budget with revenue returns from over 600, 000 barrels of crude oil per day but has also, over a period of time, invested heavily in industry infrastructure and facility development, social services and infrastructure development and, most importantly, in developing local capacity for production of industry services and products.
Pointing at ExxonMobil’s asset profile in the country, Mr. McGrath said the company’s three upstream producing organizations including Mobil Producing Nigeria (MPN) Unlimited which operates joint venture with government through Nigerian National Petroleum Corporation (NNPC); Esso Exploration & Production Nigeria Limited (EEPNL) which operates the deepwater Erha Field production sharing contract (PSC) for NNPC; and Esso Exploration & Production Nigeria (Offshore East) Limited which operates the Usan field PSC for NNPC account for about 30 percent of Nigeria’s total crude oil production with over 600,000 barrels per day (600 kbd).
ExxonMobil, he , beats its chest with over 70 discovered fields the development and production of which entailed investments in acquisition of 108 offshore platforms and two offshore natural gas liquids (NGL) extraction plants.
Providing conduits to hydrocarbon gas and liquids produced from almost exclusively offshore terrains are over 1500 kilometers of pipelines deployed by the company to form part of the sustainable petroleum industry infrastructure in the country.
With growing production, his figures showed, ExxonMobil has also raised and operates five export terminals that facilitate offtake of Nigerian crude oil grades for revenue exchange at the global commodity exchange markets.
The company operates the Qua Iboe Terminal (QIT), Yoho Floating, Storage and Offloading (FSO) vessel, the Bonny River Terminal (BRT), the Erha Floating Production, Storage, and Offloading (FPSO) Vessel, and the and Usan FPSO.
In providing details of the configuration of ExxonMobil’s workforce in Nigeria, Mr. McGrath declared, with two pointed eyebrows that willed the audience to take notice of his point, that the company has a local workforce of about 2800 out of which 2688 are Nigerians, and 1120 of them from Akwa Ibom State. This is practical Nigerian content and local content jointly delivered, he pointed out.
Outside the workforce, he said, ExxonMobil in Nigeria has continued to drive inclusive orientation of local stakeholders through workforce development, supplier development and community investments which, according to him, for the key elements that define the company’s National Content Strategy.
He said the key elements also form the principles that guide the company’s Nigerian content implementation strategies.
The principles, according to him, include incorporation of Nigerian content development into ExxonMobil’s businesses and projects, collaboration with stakeholders on Nigerian content implementation, integration of the Nigerian content principle in the company’s systems and processes, and adoption of systematic approach to secure sustainable long-term benefits.
With 96 percent Nigerian workforce, Mr McGrath stated that ExxonMobil has committed to sustainable workforce capacity development through deliberate programmes that include the eestablished the Eket Technical Training Centre where, according to him, over 700 City & Guilds Full Technician certified graduates have been produced. He added that over 90 of the graduates from the center have been employed NNPC/MPN joint venture.
Also on capacity development, Mr McGrath stated that ExxonMobil in Nigeria has also mapped out strategies programmes for local research and development capacity in which local contractors are integrated into field studies and seismic processing. He said about eight indigenous companies including the Integrated Data Services Limited, the oilfield services arm of NNPC, have benefited from the programme.
He added that ExxonMobil is also in engineering service agreements with DeltaAfrik and National Engineering and Technical Company (NETCO), a subsidiary of NNPC, for development of in-country engineering capabilities.
On a more sustainable platform, he said ExxonMobil has since 2007 invested over N1.45 billion on University
Assistance/Partnering Program (UAP/UPP) to equip geoscience workrooms with facilities and software that would enhance geoscience skills in 17 Nigerian Universities. He said that over 50 lecturers have so far benefitted from the training.
Beyond the UAP/UPP, ExxonMobil has also spent over one billion Naira on postgraduate scholarships, provided over 300 internship positions annually and enhanced the experience of Nigerian workforce through global work assignments.
To ensure the retention of its huge annual operations spend for the patronage of local businesses and stimulate growth of local capacity for production and supply of industry needs, ExxonMobil has also taken the responsibility to assist indigenous companies earn petroleum industry patronage.
Under its Supplier Development programme, ExxonMobil has made immense contributions towards developing in-country fabrication capacity through its Erha North Phase 2 (ENP2) project. The company selected Nigerdock and Aveon for local fabrication and production of 5641 metric tons of fabrication for the FPSO sub-structure/subsea production structures.
It also tapped METEC, Nigeria for 39 metric tons of sacrificial anodes for in-country production.
In its Satellite Fields Development 1 & 2 Projects, ExxonMobil also patronized Nigerdock & Dorman Long/Grinaker for full in-country engineering of three wellhead platforms.
Besides the opportunity it provided with the contracts, ExxonMobil also took the challenge of providing a $12 million funding for expansion of Aveon Offshore, Nigerdock, and Dorman Long Engineering (Lagos) fabrication yards.
The company, according to Mr McGrath, is also providing support to De Grills Integrated Services Ltd. to build fabrication yard capability.
In enhancing in-country line pipe manufacturing capacity, ExxonMobil became the first oil multinational, in fact the first operating company in the country, to work with SCC Pipe Mill, Abuja with the procurement of 30 kilometers of double submerged arc weld helical (DSAWH) line pipes.
The order from ExxonMobil and subsequent funding assisted in upgrading the facilities of the SCC Pipe Mills to deliver on the order and also stimulate subsisting capacity development for Made-in-Nigeria line pipes.
The funding support to SCC Pipe Mills grow its capacity for industry orders is only a fraction the results of ExxonMobil’s commitment to facilitating local companies access to funding through the highly acclaimed ExxonMobil Contractor Finance Scheme (EMCFS) with 12 Nigerian banks from where $113 million have been accessed by local industry suppliers so far.
The banks themselves formed the route for ExxonMobil’s intervention in the Nigerian money market where it has also demonstrated compliance with the local content policy with operated production project financing in which it provided patronage of over $975 million to a consortium of Nigerian.
Still under its supplier development programme, Mr McGrath declared that ExxonMobil Foundation partnered with We Connect International to train 500 women entrepreneurs on “Doing Business with Multinational Companies” yearly. He said 150 women from Akwa Ibom formed part of about 400 trained in 2017. According to him, 159 women were taken from Bonny, while 104 were taken from Lagos State. He firmly promised that more women from other locations in Nigeria would be sponsored in the programme.
According to Mr McGrath, ExxonMobil worked with We Connect and its partners to sponsor and mentor over 250 women entrepreneurs to the 2017 WIM Conference, implemented internal strategy to promote WBE, increased opportunity for participation in bid events, facilitated women to work as sub-contractors to ExxonMobil major suppliers, and focused on key areas of base strength.
With the We Connect partnership, Mr McGrath stated that ExxonMobil has patronized women owned businesses with $23 million in 2016, increased women business participation in the oil and gas sector, attracted more competitive suppliers through strategic collaboration with eight new Contract awards in 2017.
Besides deliberately patronizing indigenous local businesses with its operations funds, ExxonMobil is driving development of its local communities as part of its corporate social responsibility programmes.
Mr McGrath stated in Uyo that it has spent over $130 million (N46.8 billion) on community investments in the past 10 years, adding that the projects were need specific with 80 percent of them nominated and executed by communities in Akwa Ibom and Rivers States respectively.
Mr. McGrath added that ExxonMobil made 30 percent contribution to rehabilitation of Eket-Ibeno Road which was delivered in conjunction with the state government.
In explaining the company’s contribution towards provision of education to youth’s in the country, Mr McGrath said
ExxonMobil has spent over N4.0 billion in undergraduate scholarship to Nigerian students over the last two decades; with over 50 percent awarded to students from Akwa Ibom
He added that the company has also spent over N57 million on NNPC/JV secondary school scholarships targeting Akwa Ibom indigenes. He also pointed at the company’s Graduate Assistance Programme through which it trained and empowered 750 unemployed graduates in Akwa Ibom state to be employable and possibly become self employed.
In the last two decades, he said, ExxonMobil has enhanced community health by incentivizing health workers to support local communities and sustaining subvention to the VVF Centre in Uyo, Akwa Ibom State.
Mr McGrath said ExxonMobil plans construction of Trauma Center in Uyo, Faculty of Engineering block in the University of Uyo, and restoration of Ibeno Beach near Eket all in Akwa Ibom State.
Outside Akwa Ibom State, he said, ExxonMobil also plans Waste to Wealth empowerment project in Yola ; Oluponna Fish Farming Educational Resource Centre, Osun State; and Solar systems for IDPs in the country.
According to Mr McGrath, ExxonMobil sees Nigerian Content Development beyond mandatory regulatory pass mark. He emphasized that local content implementation strategies must deliver benefits to the people through deliberate strategies for development of relevant infrastructural and human capital capacity that would trap down significant petroleum industry budget for dissolution into patronage of local goods and services.
He concluded: “National Content (NC) is a coordinated, focused and sustainable approach to developing human, social and economic capacity – with tangible results for people, communities, and businesses in host countries”
He pointed out that ExxonMobil had adopted the principles of Nigerian Content Development in its operations strategies long before the law was enacted, adding that the company sees the strategy as healthy for its business.