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Local Content Strategy
on Implementing Construction Plans
THOMAS DOUGLAS NIGERIA LIMITED
A R C H I T E C T U R E • E N G I...
THOMAS DOUGLAS
Once upon a time there was a couple who had been
married for 30 years without a child...
THOMAS DOUGLAS
Then one day the man left his wife and went on a sojourn
across Africa looking for answers...
THOMAS DOUGLAS
...After a few years he came back with a love child and asked
his beloved wife to take care of the child as...
THOMAS DOUGLAS
THOMAS DOUGLAS
LOCAL CONTENT STRATEGY ON IMPLEMENTING
CONSTRUCTION PLANS
• Understanding the content rules involved in off...
THOMAS DOUGLAS
LEARNING GOALS
Introduce offshore construction
Define Nigerian Local Content Policy
Learn a Brief History o...
THOMAS DOUGLAS
CATEGORIES OF OFFSHORE CONSTRUCTION
OFFSHORE PLATFORM
CONSTRUCTION
- RISER INSTALLATION
- TOPSIDE INSTALLAT...
THOMAS DOUGLAS
INTRINSICS OF OFFSHORE CONSTRUCTION
• not for the faint heartedCAPITAL INTENSIVE
• the oceans could be very...
THOMAS DOUGLAS
DEFINE NIGERIAN LOCAL CONTENT POLICY
“Nigerian Content in the Petroleum sector is defined as the quantum
of...
THOMAS DOUGLAS
1969
• First
Petroleum Act
• Regulation 26
Advocates
Indigenization
of the Industry
1971 - 1977
• Establish...
THOMAS DOUGLAS
BRIEF HISTORY
1969
• First
Petroleum Act
• Regulation 26
Advocates
Indigenization
of the Industry
1971 - 19...
THOMAS DOUGLAS
BRIEF HISTORY
1969
• First
Petroleum Act
• Regulation 26
Advocates
Indigenization
of the Industry
1971 - 19...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT CYCLE
Strategic Planning
APPRAISAL /ACTION PLAN
Strategic Implementation
CAPACITY BUIL...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT – NOGIC JQS
THOMAS DOUGLAS
Nigeria Oil and Gas Industry Content Joint Qualification System (NOGIC JQS)
• Marine Vessels Ownership Data...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT – TARGET vs. CAPABILITIES
0
10
20
30
40
50
60
70
80
90
100
100 100 100 100
90
55
15
25...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT
COLLABORATIVE IMPLEMENTATION MODEL
Regulator
Operator
Indigenous
Service
Provider
Fore...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT – TRAINING AND EMPLOYMENT
Project Based
Training and
Attachment
JQS as staff
sourcing
...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT – MARINE VESSEL OWNERSHIP SCHEME
60% of marine assets in the hands of Nigerians by 201...
THOMAS DOUGLAS
STRATEGIC MANAGEMENT – MARINE ASSET OWNERSHIP
Adapted From Nigerian Content Marine Vessel Categorization Pr...
THOMAS DOUGLAS
Nigerian Content Development Fund (NCDF)
Topside Integration Facilities, Pipe Mills, Dry Docks
Nigeria Oil ...
THOMAS DOUGLAS
VALUE BASED PROJECT MANAGEMENT
EXPLORE AND
APPRAISE
DEVELOP PRODUCE TRANSPORT PROCESS DISTRIBUTE
ASSESS,EXP...
THOMAS DOUGLAS
CONSTRUCTION COST MANAGEMENT
Includes the processes involved in Estimating, Budgeting and Controlling costs...
THOMAS DOUGLAS
IMPROVED EMPLOYMENT AND TRAINING OF LOCALS
Over 30,862 jobs within first 3 yrs (10,792 in Fabrication, 6,79...
THOMAS DOUGLAS
CONCLUSION
More work for indigenous local contractors such as
Thomas Douglas, with the construction of new ...
THOMAS DOUGLAS
RECOMMENDATIONS – T E S T
Timely manner
•Already Nigeria has lost 70% of her
exports to her biggest market,...
THOMAS DOUGLAS
THOMAS DOUGLAS
• Technical Data Sheets
• Utility, Cost And Weight Estimates
• Performance Specifications
• Code Compliance...
THOMAS DOUGLAS NIGERIA LIMITED
E N G I N E E R I N G • P R O C U R E M E N T ▪ C O N S T R U C T I O N
S&B Floor, Top Notc...
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Presentation by Nimi Erekosima of Thomas Douglas Limited at the Subsea Vessels Africa Conference

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Presentation by Nimi Erekosima of Thomas Douglas Limited at the Subsea Vessels Africa Conference

  1. 1. Local Content Strategy on Implementing Construction Plans THOMAS DOUGLAS NIGERIA LIMITED A R C H I T E C T U R E • E N G I N E E R I N G ▪ C O N S T RU C T I O N LAGOS ▪ PORT HARCOURT www.thomas-douglas.com - Nigeria as case study NIMI GODFREY EREKOSIMA PRINCIPAL PARTNER
  2. 2. THOMAS DOUGLAS Once upon a time there was a couple who had been married for 30 years without a child...
  3. 3. THOMAS DOUGLAS Then one day the man left his wife and went on a sojourn across Africa looking for answers...
  4. 4. THOMAS DOUGLAS ...After a few years he came back with a love child and asked his beloved wife to take care of the child as she would her own... The child’s name was Local Content
  5. 5. THOMAS DOUGLAS
  6. 6. THOMAS DOUGLAS LOCAL CONTENT STRATEGY ON IMPLEMENTING CONSTRUCTION PLANS • Understanding the content rules involved in offshore construction • Capabilities needed and required • Cost management and critical aspects of the project
  7. 7. THOMAS DOUGLAS LEARNING GOALS Introduce offshore construction Define Nigerian Local Content Policy Learn a Brief History of the Nigerian Local Content Policy Identify the NC Strategies Applicable in the Nigerian Offshore Construction Industry View Critical Aspects of the Project Through the Concept of Value Addition Appreciate the impact of NC in the Nigerian Offshore Construction Industry We will:
  8. 8. THOMAS DOUGLAS CATEGORIES OF OFFSHORE CONSTRUCTION OFFSHORE PLATFORM CONSTRUCTION - RISER INSTALLATION - TOPSIDE INSTALLATION - MODULAR UNITS OFFSHORE PIPE LAYING - SUBSEA PIPING - PIPE BURIAL - PIPELINE TESTING MAJOR OFFSHORE MAINTENANCE - ADDITIONAL WELL INSTALLATION - TOPSIDE MODIFICATION - PIPELINE REPLACEMENT O F F S H O R E S U P P O R T V E S S E L S CONSTRUCTION OF SUPPORT FACILITIES – LOGISTICS BASES – INDUSTRIAL PARKS FOR OEMs – SUPPORT VESSELS – MAINTENANCE WORKSHOPS
  9. 9. THOMAS DOUGLAS INTRINSICS OF OFFSHORE CONSTRUCTION • not for the faint heartedCAPITAL INTENSIVE • the oceans could be very deep and coldHIGH PREMIUM ON QHSE • makes senseMOST FABRICATION WORK DONE ONSHORE • it better be for that cost!HIGHLY SPECIALIZED • Water and air benders neededINSTALLATION DEPENDENT ON WEATHER WINDOW • no new friendsDEVELOPED SUPPLY CHAIN • If you survive all of the aboveHIGHLY REWARDING
  10. 10. THOMAS DOUGLAS DEFINE NIGERIAN LOCAL CONTENT POLICY “Nigerian Content in the Petroleum sector is defined as the quantum of composite value added or created in the Nigerian economy through the deliberate utilization of Nigerian human and material resources in the provision of goods and services without compromising quality, health, safety and environmental standards”. Add value to local economy through Capacity development of Individuals, businesses, and institutions Retention of spend to stimulate local economy Encourage sustainability through responsible use of resources
  11. 11. THOMAS DOUGLAS 1969 • First Petroleum Act • Regulation 26 Advocates Indigenization of the Industry 1971 - 1977 • Establishment of Nigerian National Oil Corporation (NOC) • Merger of NOC and Petroleum Ministry • Nigerian National Petroleum Corporation (NNPC) formed • Acquisition of National Interests • Domiciliation of significant portions of Oil & Gas derivatives 2010 - 2014 •Establishes a new body NCMB outside NNPC •Sets out specific targets for LC •50% of Multi national coy Assets to be vested in Nigerian subsidiary •Nigerian indigenous company defined to be 51% owned by indigenes. •Indigenous Companies have first consideration for licenses, Oil blocks, Contracts •Indigenous companies have exclusivity on land and swamp activities •Creates Opportunities for Indigene’s employment and training •Power of the Minister to approve 3- year waiver for areas of insufficient capacity •Fines for non-compliance BRIEF HISTORY
  12. 12. THOMAS DOUGLAS BRIEF HISTORY 1969 • First Petroleum Act • Regulation 26 Advocates Indigenization of the Industry 1971 - 1977 • Establishment of Nigerian National Oil Corporation (NOC) • Merger of NOC and Mines and Steel Ministry • Nigerian National Petroleum Corporation (NNPC) formed • Acquisition of National Interests • Domiciliation of significant portions of Oil & Gas derivatives 2010 - 2014 •Establishes a new body NCMB outside NNPC •Sets out specific targets for LC •50% of Multi national coy Assets to be vested in Nigerian subsidiary •Nigerian indigenous company defined to be 51% owned by indigenes. •Indigenous Companies have first consideration for licenses, Oil blocks, Contracts •Indigenous companies have exclusivity on land and swamp activities •Creates Opportunities for Indigene’s employment and training •Power of the Minister to approve 3- year waiver for areas of insufficient capacity •Fines for non-compliance
  13. 13. THOMAS DOUGLAS BRIEF HISTORY 1969 • First Petroleum Act • Regulation 26 Advocates Indigenization of the Industry 1971 - 1977 • Establishment of Nigerian National Oil Corporation (NOC) • Merger of NOC and Petroleum Ministry • Nigerian National Petroleum Corporation (NNPC) formed • Acquisition of National Interests • Domiciliation of significant portions of Oil & Gas derivatives 2010 - 2014 •Establishes a new body NCDMB outside NNPC •Sets out specific targets for LC •50% of Multi national coy deployed assets to be vested in Nigerian subsidiary •Nigerian indigenous company defined to be 51% owned by indigenes. •Indigenous Companies have first consideration for licenses, Oil blocks, Contracts •Indigenous companies have exclusivity on land and swamp activities •Creates Opportunities for Indigene’s employment and training •Power of the Minister to approve 3- year waiver for areas of insufficient capacity •Fines for non-compliance
  14. 14. THOMAS DOUGLAS STRATEGIC MANAGEMENT CYCLE Strategic Planning APPRAISAL /ACTION PLAN Strategic Implementation CAPACITY BUILDING/ EVALUATION Value added to Nigerian economy A B
  15. 15. THOMAS DOUGLAS STRATEGIC MANAGEMENT – NOGIC JQS
  16. 16. THOMAS DOUGLAS Nigeria Oil and Gas Industry Content Joint Qualification System (NOGIC JQS) • Marine Vessels Ownership Data • Contract Processing Data • Equipment Ownership • Nigerian Content Compliance Certificate Data • Skill Base Tracking • Training and Employment Data • Nigerian Content Plans and Reports Archive • Expatriate Quota Utilization and Succession Data STRATEGIC MANAGEMENT – NOGIC JQS DATA CAPTURE DATA MANAGEMENT • Categorization of oil and gas service companies • Industry data base for skills verification. • Verification of available in-country capacity • Effective information exchange across stakeholders • Compliance Monitoring • Test data uploaded • Launch Q2 2012 Adapted From Nigerian Content Implementation Model, 2013
  17. 17. THOMAS DOUGLAS STRATEGIC MANAGEMENT – TARGET vs. CAPABILITIES 0 10 20 30 40 50 60 70 80 90 100 100 100 100 100 90 55 15 25 % TARGET % CAPABILITIES ACTIVITY NC TARGET RANGE (%) UNIT OF MEASUREMENT ENGINEERING OF OFFSHORE FACILITIES 50 - 90 MAN-HOUR FABRICATION AND CONSTRUCTION 50 - 100 TONNAGE MAINTENANCE/ MODIFICATION 45 - 70 SPEND/ TON/VOL SUPPORT VESSELS 45 - 100 SPEND Adapted From 7E Nigerian Content Development – Presentation by Ernest Nwapa, ES NCDMB Source: NOGIC Act, 2010
  18. 18. THOMAS DOUGLAS STRATEGIC MANAGEMENT COLLABORATIVE IMPLEMENTATION MODEL Regulator Operator Indigenous Service Provider Foreign Partner • Training and employment of Nigerians; • Promoting indigenous ownership of marine vessels, offshore drilling rigs, etc; • Establishment of critical facilities such as pipe mills, dry docking and marine facilities, pipe coating facilities; STRATEGY FOCUS Adapted From 7E Nigerian Content Development – Presentation by Ernest Nwapa, ES NCDMB
  19. 19. THOMAS DOUGLAS STRATEGIC MANAGEMENT – TRAINING AND EMPLOYMENT Project Based Training and Attachment JQS as staff sourcing platform NCDMB + PETAN = NCEmI NCDMB Direct Training Programs Community Environmental Remediation Training Construction Skills Training Institutional Development Upgrade Identified institutions into O&G TCEs Establish Subsea Academy Establish Engineering Academy Facilitate International Certification Expatriate Quota Management Monitor Quota Monitor Succession Planning Nigerian Content Employment Initiative (NCEmI); Joint Qualification System (JQS); Petroleum Technology Association of Nigeria (PETAN); Oil and Gas Training Centre of Excellence (OG TCE) Adapted From Nigerian Content Human Capacity Development Initiative Implementation Guidelines, 2014
  20. 20. THOMAS DOUGLAS STRATEGIC MANAGEMENT – MARINE VESSEL OWNERSHIP SCHEME 60% of marine assets in the hands of Nigerians by 2015 Encourage construction of vessels in Nigerian yards Promote ownership of marine vessels by Nigerian entities Stimulate flagging & registration of vessels in Nigeria Deepen Nigerian manning of marine vessels Inter Agency collaborative enforcement of the Nigeria Coastal and Inland Shipping (CABOTAGE) Act. NIMASA+NCDMB CABOTAGE Vessel Financing Fund (CVFF) Nigerian Maritime Administration and Safety Agency (NIMASA)
  21. 21. THOMAS DOUGLAS STRATEGIC MANAGEMENT – MARINE ASSET OWNERSHIP Adapted From Nigerian Content Marine Vessel Categorization Procedure, 2013 OFFSHORE RIG ACQUISITION STRATEGY- ORAS – Establish SPV. – 50% equity set aside for Nigerian ownership in blocks to be taken up as Nigerian capacity increases.
  22. 22. THOMAS DOUGLAS Nigerian Content Development Fund (NCDF) Topside Integration Facilities, Pipe Mills, Dry Docks Nigeria Oil and Gas Industrial Park Scheme (NOGIPS) Nigerian Content Equipment Certificate (NCEC) Offshore Rig Acquisition Strategy (ORAS) Original Equipment Manufacturer (OEM) Strategy Equipment Components Manufacturing Initiative (ECMI) STRATEGIC MANAGEMENT – RELEVANT INITIATIVES
  23. 23. THOMAS DOUGLAS VALUE BASED PROJECT MANAGEMENT EXPLORE AND APPRAISE DEVELOP PRODUCE TRANSPORT PROCESS DISTRIBUTE ASSESS,EXPLORE, APPRAISE DEVELOP VIABLE FIELDS PRODUCE AND EXTRACT MINERALS TRANSPORT RAW MATERIALS THROUGH PIPELINES/ SHIP PROCESS RAW MATERIALS INTO FINISHED PRODUCTS DISTRIBUTE, MARKET FINISHED PRODUCTS Business decision to convert an opportunity into an asset which creates value to its owners. VALUE PROJECT SCOPE TIME QUALITY COST PROCUREMENT RISK COMMUNICATION •LEAN CONSTRUCTION •VALUE FOR MONEY •LIFE-CYCLE COSTING •COST OF QUALITY •VALUE ENGINEERING •DISCOUNTED CASHFLOW •NET PRESENT WORTH •COST BENEFIT •OPPORTUNITY COST •UTILIZATION FACTOR •OPTIMIZATION •EARNED VALUE MAXIMISE ASSET VALUE INCEPTION FEASIBILITY FEED & DETAILED DESIGN CONSTRUCTION & COMMISIONING OPERATIONS & MAINTENANCE VALUE ARTICULATION AND PROJECT DEFINITION OPTIMIZATION OF BENEFITS AND COSTS LESSONS LEARNT OIL AND GAS VALUE CHAIN CONSTRUCTION PROJECT LIFE-CYCLE – PROJECT OBJECTIVES MUST BE CHAMPIONED BY ALL
  24. 24. THOMAS DOUGLAS CONSTRUCTION COST MANAGEMENT Includes the processes involved in Estimating, Budgeting and Controlling costs so that the project objectives are met within the approved budget. Estimation – Develop approximate monetary resources needed to complete project activities Budgeting – Aggregation of costs estimated in order to establish an authorized cost baseline Control – Monitoring progress and changes to cost baseline. Source: Project Management Book of Knowledge, 2013 Contracting strategy •PSC, JOA, SC Procurement strategy •Locally sourced, imported Project scope Engineering design Stakeholder requirements •Taxes, regulations Risk management strategy Resource requirements •Human, equipment, materials Operational expenditure FACTORS THAT IMPACT CONSTRUCTION COST BASELINE
  25. 25. THOMAS DOUGLAS IMPROVED EMPLOYMENT AND TRAINING OF LOCALS Over 30,862 jobs within first 3 yrs (10,792 in Fabrication, 6,797 Post training employment, 3,000 in Vessel servicing, 1,500 Equipment manufacturing) INCREASED INDIGENOUS VESSEL OWNERSHIP 65% of Vessels – Class AAA and Category A combined 45% of Vendors – Category A MORE NIGERIANS OWNING CRITICAL MARINE ASSETS Pipe laying barges, Drilling equipment, Drilling rigs, Dry-docking Logistics bases etc. RETENTION OF MORE ANNUAL OIL AND GAS SPEND IN-COUNTRY About $10Billion of the $20Billion capital flight MORE ROBUST FORWARD, BACKWARD AND FINANCIAL LINKAGES Banking, Manufacturing, Education, Legal sectors benefit NEGATIVE IMPACT ON GDP SHORT TERM 2009 (pre-NOGICD) was 17.8% compared to 14.4% by 2013 (post-NOGICDA era) IMPACT ON INTERNATIONAL FREE TRADE AGREEMENTS Protectionist in nature INCREASES CONSTRUCTION COST SHORT TERM Contingency, Cost of quality, Interest rate, Inflation The ayes have it! NIGERIAN CONTENT IMPACT ON OFFSHORE CONSTRUCTION
  26. 26. THOMAS DOUGLAS CONCLUSION More work for indigenous local contractors such as Thomas Douglas, with the construction of new pipe mills, new industrial parks, new fabrication yards, new vessels, new production platforms, new pipeline projects etc. Better access to funds through economic linkages to financial institutions, NCDF etc. Improved project schedule as local manufacturing eliminates time wasted on importation and improves just-in-time deliveries. Transfer of technology ensures a better trained workforce The success of this marriage is vital to the implementation of construction plans. It means:
  27. 27. THOMAS DOUGLAS RECOMMENDATIONS – T E S T Timely manner •Already Nigeria has lost 70% of her exports to her biggest market, the USA. And shall loose more due to the latter's embrace of shale oil and other energy sources. Effective manner •Labour cost amounts only between 10-20% of the Total DC of production as compared to procurement's 54%. Therefore Manufacturing is key. Strategic manner •Look beyond present hassles. A capacious LC translates to cheaper, faster first oil and gas. Transparent manner •Unpredictable regulations hamper investment opportunities. To make the marriage work the Family must collaborate in a(n):
  28. 28. THOMAS DOUGLAS
  29. 29. THOMAS DOUGLAS • Technical Data Sheets • Utility, Cost And Weight Estimates • Performance Specifications • Code Compliance Analysis • Architectural Shop Drawings • Structural Shop Drawings • Room Data Sheets • Bills Of Materials • Furnishings, Equipment and Fixture Selection • Mechanical (Piping) Shop Drawings • Electrical (EIT) Shop Drawings • HVAC Shop Drawings • Fire & Safety Communications Shop Drawings. • Detailed Design Review • Bid Package Preparation • Bid Evaluation • Determine Company Procurement Standards • Utilize Preferred Vendors Database • Identify Long-lead Time Items and Place Orders • Incorporate Local Knowledge Of Approved Offshore Materials • Utilize Knowledge Of NOGICDA Requirements On Importation Of Materials To Nigeria • Coordinate Shipment And Customs Clearance Of Imported Materials • Provide Local Logistics and Transportation • Fabrication Contract Assistance • Fabrication Inspection • Change Order Review • Payment Request Review • Submittals / Shop Drawing Review • Lifting Procedures • Integration / Mating Plan • Tie-ins To Utility Systems • Systems Testing In Fabrication Yard • Systems Testing On-Site • RFI / Site Query Resolution • QHSE Management • Final Acceptance / Punch List ... a multi-disciplinary Engineering, Procurement and Construction Project Management firm 100% Nigerian owned. CORE VALUES ...leading, innovative and reliable player in the provision of premium, sustainable, client-oriented, cost effective , safe, and timely - bespoke solutions. THOMAS DOUGLAS IS...
  30. 30. THOMAS DOUGLAS NIGERIA LIMITED E N G I N E E R I N G • P R O C U R E M E N T ▪ C O N S T R U C T I O N S&B Floor, Top Notch Building▪ Ajiwe Km 23 Lekki-Epe Expressway ▪ Lagos, Nigeria Tel: 01- 7374027, 0703 2240125, 0803 4673729 • E-mail: info@thomas-douglas.com; constarng@gmail.com Website: www.thomas-douglas.com

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