More than 10,000 jobs may also be affected, if the Final Investment Decision on the Zabazaba deep water project is delayed beyond the second quarter of 2018.

The Guardian learnt that uncertainty over fiscal terms in the Petroleum Industry Governance Bill and low oil prices contributed to the delay in FID by investors.

Indigenous companies like Dorman Long Engineering Nigeria Limited, Nigerdock, Aveon Offshore Limited, Energy Works Technology Limited (EWT), Lagos Deep Offshore Logistics Base (LADOL) had invested in building yards to enable them to contribute to the Nigeria content in the Egina FPSO project.

LADOL, Nigerdock, and Samsung Heavy Industries, for instance, invested over $1.3 billion to enhance their productive capacity for Egina and other projects in the sector.

The companies engaged in the fabrication of approximately 60,000 tonnes of equipment in various yards in-country, including specialised equipment like pressure vessels, flare tower, helideck, living quarters, large FPSO structures and complex subsea structures.

But with other projects that would have kept the yards busy yet to be approved, some of the indigenous firms have remained idle while their workers have begun losing their jobs.

The $13.5 billion Zabazaba deep water oilfield, with proven reserve of 560 million barrels of oil in Oil Prospecting Lease (OPL) 245, is yet to be finalised. The oilfield measures 1,200 – 2,400 metres. Its main features include the construction of the FPSO, sub-seal installations and drilling rigs.

The BSWA deep water project is also yet to make a headway. The field is located in the Gulf of Guinea. Shell had described the project as needing tendering cycle, resolution of non-technical risks, quality and timeliness of Front-End Engineering and Design (FEED) delivery, and Nigerian content requirements.

A visit to some of the yards showed they were totally empty while activities at others had slowed. Nigerdock was said to have sacked over 2,000 workers, following the completion of fabrication for the Egina project. Other companies slashed the salaries of workers, pending the availability of new projects.

The LADOL SHI-MCI yard in Lagos, which has a new fabrication and integration yard and a new purpose-built 500-meter long integration quay, was constructed under the FPSO package contract for the fabrication of six FPSO topside modules.

Aveon Offshore Limited, an oil and gas engineering and fabrication company, was awarded a sub-contract from FMC Technologies Limited Nigeria for the fabrication of subsea structures for the Egina Field. The company provided more than 5000 tonnes of subsea structures.

Energy Works Technology Limited (EWT) also invested billions of dollars in the construction of a fabrication yard where it built nine OLT BOUY Anchor Mooring Piles, each measuring 5m OD x 24m high x 40mm wall thickness and weighing 141 tonnes. The piles were built for Saipem Contracting Nigeria Limited for the Egina UFR Project in Port Harcourt.

Dorman Long Engineering Nigeria Limited also invested in a fabrication facility based in the Onne Oil and Gas Free Zone for the completion of the FPSO.

Lamenting the challenges in the sector, the Chairman of Jagal Group, Anwar Jamarkani, said the company might be forced to sack workers if there were no new projects.

He said: “Over the years, we have invested millions of man hours in training, skills development and welfare of our workforce. But we need to do more. We are, therefore, concerned that projects that were originally scheduled for commencement are now being shelved to the detriment of companies like ours.

“With no new projects on the horizon, companies may be forced to shut down. It is not our intention to send any more of our workers home.”

Samsung Heavy Industry Nigeria, recently, established a multi-million dollar FPSO integration facility on the back of the Total Upstream Egina project. It, however, needs new jobs to justify the investment.

The Managing Director, Chamwang Kim, said: “We decided to invest in Nigeria for the long term, not just for Egina. It would not make sense to invest for just one project. It is difficult to recover the investment in a short period. We do not know about next projects, but we need the support of all stakeholders.“

To ensure that new deep water projects are developed speedily, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, stressed the need for a close collaboration among industry stakeholders, particularly the Nigerian National Petroleum Corporation (NNPC), National Petroleum Investment Management Services (NAPIMS) and the Department of Petroleum Resources (DPR).

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