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BusinessDay 14 Feb 2018

18 BUSINESS DAY

18 BUSINESS DAY C002D5556 Wednesday 14 February 2018 Stories by UZOAMAKA ANAGOR-EWUZIE The $3.3 billion Egina Floating, Production, Storage and Offloading (FPSO) oil vessel, will leave the integration yard of the Lagos Deep Offshore Logistics (LADOL) base, to oil fields over 150 kilometers in deep water locations in Nigeria, at the completion of its integration process in six months’ time, Oladipupo Jadesimi, chairman of LADOL said, last week in Lagos. Built by Samsung Heavy Industrials (SHI), while LADOL served as local content partner, the vessel is expected to spend 30 years producing oil offshore Nigeria. It has spent three weeks in Nigeria and preliminary technical arrangements are in progress to enable lifting of the fabricated modules into the vessel. Jadesimi, who spoke to newsmen during a media conference at the company’s head office, said that the FPSO, which is a specialised vessel, will be used for oil SHIPPING LOGISTICS MARITIME e-COMMERCE $3.3bn Egina FPSO will leave LADOL for offshore oilfields in 6 months - Jadesimi …As LADOL plans to expand into power, transport, agro-business Oladipupo Jadesimi production offshore and was currently undergoing completion at LADOL base. “At LADOL, we can build vessel for any purpose, because the facility was basically a shipyard.” On the possibility of meeting the six months delivery timeline, Jadesimi said that LADOL facility was ready to integrate about three months ahead of time, but there were delays in the main construction yard of the FPSO in South Korea. “Total is the lead owner of the FPSO and they have people in South Korea and LADOL, who are monitoring the level of integration. So, we had plenty of time to complete the modules and to integrate. The expectation from Total was that six months should be adequate to install the modules and complete the integration,” he added. On the future of the integration yard at LADOL after the project, Jadesimi stated that LADOL facility holds great potential for the nation’s economy as no FPSO can justifiably be integrated abroad as Nigeria currently has the facility that can execute the job. Jadesimi however said that in the past, many FP- SOs that have been working in Nigeria for decades but regrettably, they were all be completed abroad and brought to do business in Nigeria’s offshore field without the country’s economy benefiting from its building. “So, there is a prospect for more fabrications and integrations of FPSO and others to be done in Nigeria. Unlike before when all the investment going into the building of the vessel was spent outside Nigeria, which means huge economic loss,” he added. Continuing, Jadesimi said: “The facility can be involved in all kinds of fabrication work. FPSO don’t get to be 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 starting with Egina.” He blamed lack of determined political will on the part of Nigeria to ensure that investment in offshore field that runs in the tens of billions of dollars were captured for the benefit of Nigerians and the economy. “When LADOL started 17 years ago, one of our objectives was to build an industrial base that will be capable of handling large offshore structure and projects from other industries too. As it happened, today the Egina is the largest FPSO in the world but, it is not only FPSO related fabrication that can be done there,” Jadesimi further explained. However, as an industrial Free Trade Zone, management of LADOL said they were perfecting plans to expand their business by going into the power sector, turbines for example, transportation, and agrobusiness. “We are looking into different aspects of the power business including turbines for example and importantly into the LNG gas market. We want to see how we can have LNG barge come to LADOL and re-gasified for power production,” Jadesimi said. Also, the promoters of the Free Trade Zone said that plans were underway to build a technical school in order to venture into human capital development, which is a very important aspect Nigeria needs to do. “We expect that before the end of the year, we will 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,” Jadesimi said. According to him, companies like Dangote Refinery and Petrochemical Complex in Lekki, will require the services of trained manpower including engineers. “Nigeria needs to have enough trained manpower for industrial growth because developing capacity to participate in the investment phase of projects will lead to industrialisation.” “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 scepticism but with the Egina FPSO currently, all doubts have been cleared. Importers fear N18.6bn annual loss to cargo palletisation policy ...Could fuel cargo diversion to neighbouring ports The Federal Government’s cargo palletisation policy, could cost Nigerian importers an estimated loss of $60 million, equivalent to N18.6 billion annually, some industry stakeholders have said. Many also fear the policy would increase the diversion of Nigerian-bound cargoes to the ports in neighbouring countries where the policy is not implemented. These were part of the outcome of a Town Hall Meeting held in Lagos last week, organised by Ships & Ports, a leading maritime media consultancy with the theme “Whither the Palletisation Policy”. According to the communiqué issued after the meeting, the stakeholders said that the policy will lead to importation of strange organisms into the country through the usage of wooden pallets. Todd Rives, managing director of CMA CGM, a container carrier calling Nigerian ports, in his presentation, said that the policy will lead to the loss of over $60 million annually, warning that the policy needs to be thoroughly thought through by government before implementation. Olayiwola Shittu, national L-R: Henry Ajoh, general manager, SIFAX Shipping Company Limited; Kunle Folarin, chairman, Nigerian Ports Consultative Council (NPCC); Hassan Bello, executive secretary/CEO, Nigerian Shippers’ Council and Olayiwola Shittu, national president, Association of Nigerian Licensed Customs Agents (ANLCA) at the town hall meeting on the Federal Government’s newly introduced cargo palletisation policy which was held in Lagos. president of the Association of Nigerian Licensed Customs Agents (ANLCA), said the policy holds no benefit for the country and “will also breed corruption” at the port. “The policy will be difficult for shippers because we are an import dependent nation. Palletisation will enhance corruption at the ports, as good chunk of the internally generated revenue in the port go into private pockets. Palletisation should not be our priority, rather let us look at how we can improve services at the ports,” Shittu said. In his view, Henry Ajoh, general manager, Shipping, SIFAX Group, who represented the executive vice chairman of SIFAX Group, Taiwo Afolabi, said that the new policy “cannot work in Nigeria” because Nigerian ports are in urgent need of enhanced and modern cargo examination system to facilitate ease of doing business. “We need scanners. Government needs to deploy technology at the ports to enhance Customs examination and release processes. That is the way to go. Palletisation takes us backward and cannot work in Nigeria,” Ajoh added. In his remarks, Hassan Bello, executive secretary of the Nigerian Shippers’ Council (NSC), insisted that palletisation of cargo is international best practice enabling enhanced physical examination of cargo by the Nigeria Customs Service (NCS). Bello, who admitted that there are cargoes that cannot be palletised, said that as a Council, it had to listen to stakeholders and take their concerns to the relevant government authorities. The Town Hall Meeting was attended by an array of maritime industry stakeholders

Wednesday 14 February 2018 C002D5556 BUSINESS DAY 19

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