Total awards Egina FPSO contract to Samsung

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Total UpstreamPetroleum Nigeria  Limited, in Joint Venturewith the Nigerian National Petroleum Corporation, NNPC, has awarded a $3.1billion Floating Production,Storage and Offloading , FPSO, vessel contract for Eginadeepwater oil field to South Korea’s Samsung Heavy Industries, SHI.

Samsung Heavy Industries, with its ship building capabilities and track record of achievements emerged the preferred bidder in a highly competitive and transparent bidding conducted bythe National Petroleum Investment Management System,NAPIMS, the investment arm of the NNPC.

The award, which has been approved by the NNPC Group Executive Committee, GEC, headed by the Minister of Petroleum Resources,MrsDiezani Alison-Madueke,follows a series of controversies regarding the local content value of the contract between Samsumg and a sister Korean firm, HyundaiHeavy Industry, HHI.

The multibillion Egina fieldlocated in Oil Mining Lease, OML130 near Akpo Field, is the third deep offshore development projects of the French oil giant in Nigeria with reserve potential of in excess of 550 million barrels and a peak production of 150,000 barrels per day.

The NNPC/Total JV decided to award the Egina FPSO contract to Samsungafter a comprehensive review of the economics, the track records of the bidders and having met all the local content requirements including 12,000-15000 tonnes in- country fabrication of topsides

Besides, as a good corporate citizen Samsung through its capacity building programme had trained many Nigerians youths over the years in South Korea in various aspect of welding, sandblasting, integrity inspection and a host of others with Americancertifications. Also, plansare underway to train more Niger Delta indigenes in South Korea, under its skill acquisition programme to improve the capacity and competence of Nigerians in 6G welding.

According to sources, Hyundai Heavy Industry HHI bided $3.8billion for the Egina FPSO while Samsung Heavy Industry stuck to $3.1billion for the same facility, a development that gave it the winning edge.

Industry experts commended the French oil giant and NNPC for the transparent manner in which they conducted the bidding process, and their determination to bring the project to reality.

Speaking on the scope of the multibillion dollar project, the General Manager, Samsung Nigeria Limited,Mr Frank Ejizu,said the new FPSO will measure approximately 330m in length, 61m in width and 33.5m in depth, and is expected to have an oil storage capacity of approximately two million barrels.

Besides, he said the FPSO will have topsides modules with a gross dry weight of 34,000tonnes, which will be delivered on schedule for the production activities by 2014.

Ejizurecalled that Samsung’s foray in Nigeria dated back to 2002, when it built the first FPSO -Bonga with a 304,400 DWT for Shell Nigeria Exploration and Production Company, SNEPCo.

He noted that Bongaremained a source of pride to the Nigeria offshore oil and gas development, adding value to the Nigeria production quota and above all to the Nigerian economy.

The Eginafield was discovered in December 2003, when the Egina-1 well was drilled. Following the discovery, the appraisal well Egina-2 was drilled in October 2004. The appraisal programme and seismic data processing resulted in the Egina-3 well drilling in September 2006, which occurred at a water depth of approximately 1,500m. Following this, Egina-4 was drilled in November 2006, and Egina-5 was drilled in January 2007.

Located 150km off the coast of Nigeria and about 20 km from Akpo oil field, theEgina oil field in Oil Mining Lease, OML 130 is a production sharing contract, PSC, being developed by Total Upstream Nigeria (24%) in partnership with NNPC (10%), CNOOC (45%), Sapetro (5%) and Petrobras (16%).

Egina is the third deep offshore development of Total in Nigeria. The field is currently under development and the production is scheduled to begin by 2014/2015.

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