Kidnappings: Oil Services Firms Flee Nigeria
By Ejiofor Alike, 03.02.2009
As oil and gas producing companies operating in the Niger Delta suffer declining output forcing them to withdraw expatriate workers from the restive region due to kidnappings and militant attacks, oil field engineering contractors have also continued to flee the country, THISDAY Checks have revealed.
Investigations showed that companies from South Africa, Holland, France and the United States are involved in the latest withdrawal of companies from Nigeria .
Aside Willbross, a United States oil field services contractor, which relocated to North America last year, and Kellogg, Brown & Root (KBR), a leading global engineering, construction and services company, that withdrew few months ago, many other companies have withdrawn from the country and relocated to other countries due to the increasing wave of kidnappings and other violent crimes in the Niger Delta.
KBR is a member of TSKJ Nigeria Limited, a joint venture, which was involved in the construction of the various trains of the Nigerian Liquefied Natural Gas (NLNG) plants in Bonny Island of Rivers State.
According to investigation, Foster-Wheeler, a United States-based global conglomerate, which was incorporated in Bermuda and with its principal executive offices in New Jersey, has also withdrawn its services from the Niger Delta.
The company is focused on Engineering, Construction and Procurement (EPC) and on power projects.
Foster Wheeler's subsidiaries, Foster Wheeler Energy Limited and Foster Wheeler Nigeria Limited, in a joint venture with National Engineering & Technical Company Limited (NETCO), a subsidiary of the NNPC executed a three-year term services contract for Chevron Nigeria Ltd.
The company's subsidiaries in the United Kingdom and Nigeria also executed a $20 million, front-end engineering and design (FEED) contract, for Chevron’s gas-to-liquids (GTL) project in Delta State .
Foster Wheeler was responsible for the FEED and the preparation of the invitation to tender for the engineering, procurement and construction (EPC) contract.
Herrieme, an international company from Holland could also not stay in Nigeria due to the restiveness in the Niger Delta.
THISDAY also gathered that Grinaker, a South African company has also withdrawn from Nigeria due to the increasing volatility of the operating environment.
Grinaker is a multi-disciplinary construction and engineering group, anchored in South Africa and focused on selected infrastructure, energy and mining opportunities in Africa .
The company has an annual turnover in excess of $ 1billion and employs some 15,000 people.
Also last week, Globestar, withdrew its workers from Warri in Delta State, after armed youth invaded its premises and killed its security adviser.
Acergy S.A. recently announced the award of a contract valued at about $50 million for the fabrication, assembly and testing of eight manifolds and support structures, 8 suction piles, 23 well jumpers and other subsea structures for Total's Usan Oilfield located offshore Nigeria on behalf of Cameron Offshore Systems Nigeria Ltd.
THISDAY gathered that this contract is being executed at Globestar Yard in Warri.
Beside kidnapping of oil workers and destruction of oil and gas installations, some chief executives of some indigenous oil services firms, who spoke to THISDAY on the matter, attributed the exodus of these foreign companies partly to lack of jobs in the oil and gas sector.
"Some companies are reluctant to come because of lack of job flow," said a CEO, who spoke on condition of anonymity.
Chairman and Chief Executive Officer of the International Energy Services Limited, Dr. Diran Fawibe, blamed the lack of jobs in the industry to the Niger Delta crisis.
He told THISDAY that the international oil companies have a lot of projects, which could not be executed due to the restiveness in the Niger Delta.
"If the oil companies are postponing projects, there will be no jobs for the oil services contractors. The Niger Delta crisis is responsible for this situation," he said.
It was gathered that the contracts mostly affected are major Engineering Services Agreement (ESA), which are projects that are above 50,000 man hours and a contract ceiling of $80 million per contractor.
THISDAY Checks further showed that Medium and Small Scale Engineering Services Agreements (MSSESA), which falls below 50,000, man hours and has a contract ceiling of $40 million per contractor, were also affected.
MSSESA has contract duration of two years, with an option for one-year extension.
