Viewpoint

August 18, 2014

Nigerian content, LADOL, and the Transformation Agenda

By Umaru S. Abdullahi
IT was a bright, sunny morning that day. Date was December 11, 1998. The rustic setting was the ancient town of Kaiama in Bayelsa State.

About 5,000 Ijaw youths drawn from over 500 communities from over 40 clans that make up the Ijaw nation had gathered to make what is now known as the Kaiama Declaration.

The explicit summary of the Kaiama deliberation and declaration is a cry and protest against the unending degradation of the Ijaw and indeed the Niger Delta environment through uncontrolled exploration and exploitation of crude oil and gas. This, they complained, has led to oil spillages, gas flaring, flooding and coastal erosion.

The consequence of all these, in their words, is that “the quality of life of Ijaw people is deteriorating as a result of utter neglect, suppression and marginalization visited on Ijaws by the alliance of the Nigerian state and transnational oil companies”.

There is, however, an implicit issue in the Kaiama protest. It is the question of employment and empowerment of the people. More than 70 per cent of the youths that championed the Kaiama call for ownership of their land, natural resources and self determination were unemployed. If they were gainfully employed, perhaps they would have been more appreciative of even a gradual development in their region. Importantly, they would have been more constructive and strategic in their engagement with the federal government and multinational oil companies.

But the military government, ever short of foresight, rather than engage these youths, deployed soldiers to quell the protest and suppress the agitation. Not a few of the youths were killed. By 2004, flickers of youth militancy to come were quite clear; the emergence of the Movement for the Emancipation of the Niger Delta, MEND, epitomized the apogee of youth militancy. Bombing of oil installations, kidnapping and murder had become familiar news by 2009. Nigeria had been stretched to a breaking point. The Umaru Musa Yar’Adua government was almost at its knees as production of crude oil dropped by over 50 per cent.

It took the intervention of the Niger Delta elders and leaders plus the historic announcement of unconditional amnesty for all the militants and the proclamation of a massive programme of rehabitation through training, capacity building and empowerment, to convince the militants to drop their arms and come to a negotiating table.

Sword of Damocles

About the same period, far away in the North, another restive youthful sect known today as Boko Haram had sprouted and like the dreaded sword of Damocles loomed in the North East. Today, their crude, barbarous and wanton destruction of lives and property and the mindless abduction of over 200 young girls of Government Girls Secondary School, Chibok, Borno state, has stirred the soul of the world.

Those with a sense of history, understand the hard fact that beneath the festering insurgency and militancy in Nigeria today is the burgeoning issue of unemployment. If majority of graduates had jobs and the quasi-literate are engaged as artisans, there would be less idle minds to fall prey to sophistry and satanic characters.

But Nigeria seemed to have abdicated her responsibility to the youths. And as a former united Nations Secretary General, Kofi Annan puts it, “A society that cuts off from its youth, severs its life line”.

The urgent need to create jobs and importantly strengthen Nigerian companies to increase their employment capacity and capability explains easily the deafening ovation that greeted the signing into law of the Nigerian Content Act by President Goodluck Ebele Jonathan on April 22, 2010.

Four years after, this law with oil and gas thrust is yielding massive results and actualizing one of the hey issues in President Janathan’s transformation agenda- employment and empowerment of Nigerians. Indigenous oil service companies and even those in the upstream sector are today employing tens of thousands of Nigerians. They are joining hands to reinforce the efforts of government to raise the brave torch of opportunities and hope that illuminates the way to a future of promise.

This quest for a robust hope and an unwavering march into a peerless future which the Nigerian Content Law epitomizes, received a major boost when on March 15, 2013 Samsung through a joint bidding with LADOL, a world class indigenous oil service company, standing as its Nigerian content partner, won the contract for the construction and installation of Total’s US$3.8 billion Floating Production Storage and Offloading (FPSO) unit otherwise known as the Egina FPSO Project. LADOL had executed world renowned projects including supporting the final installation of FPSO unit for Chevron’s US$11 Billion Agbami deep water field, currently producing about 250,000 barrels of crude oil per day.

LADOL was therefore poised for the Egina FPSO project. The job was familiar and the memorandum of agreement was clear and specific. And it is the development, construction, and operation of an offshore fabrication yard and FPSO at LADOL’s Free Zone at Tarkwa Bay, Lagos. There is also a provision of US$214 million allocated in the contract for the creation of a legacy facility in the form of an FPSO Integration Facility at LADOL.

This singular contract will empower LADOL to employ over 50,000 Nigerians apart from already existing staff, in addition to giving them training opportunities. The Egina FPSO Project in simple language, was therefore a poster boy of the Nigerian Content Law.

The Samsung team soon commenced work at the LADOL premises and this project with a huge promise seemed irreversibly on. But the cold harmattan month of December brought with it chilling news.

The Samsung team had suddenly stopped work and left the construction and fabrication site. Reason? Samsung told LADOL that it had received a letter from the Ministry of Transportation, through the Nigerian Ports Authority (NPA) ordering it to stop work at the site claiming that LADOL’s Freezone was no longer suitable for the construction and operation of an offshore fabrication yard and FPSO integration facilities. But contrary to Samsung’s claim, NPA has since affirmed that it never sent any letter to Samsung asking it to stop work. To clear any iota of doubt over its position, the NPA wrote a letter to SAMSUNG requesting it to return to LADOL’s site at Tarkwa Bay to continue with the execution of the construction and fabrication job as agreed with LADOL.

Not only that, NPA further reaffirmed its confidence in LADOL and the capacity and capability of the indigenous organization to live up to expectations as far as this project was concerned.

LADOL has since gone to court to seek redress. Close watchers of the oil and gas industry are of the opinion that Samsung’s termination of the partnership constitutes a huge obstacle to a potentially massive corporate partnership. More importantly, they hold the opinion that the Federal Government must intervene to ensure that LADOL is not short changed in the Egina Project because of the huge employment opportunities it holds for Nigerians. Said a petroleum engineer who declined to be named, “One of the core transformational agenda of President Jonathan is employment and empowerment of Nigerians, and that is what the Nigerian Content Law is about. For me, the LADOL/ Samsung contract from Total exemplifies the very essence of Nigerian Content.

The Nigerian government and Nigerians must therefore support LADOL and encourage the firm. It is a company that all Nigerians and government in particular must support. Government must also support companies giving jobs to Nigerians, the youth in particular. It is one of the most efficacious ways to check militancy and insurgency”, he concluded.

One couldn’t have agreed any less. The NCDMB must be at alert. It must ensure that the very purpose for its existence is not defeated through allowing some foreign firms to get away with actions that gravely undermine the capacity of indigenous companies to actualize their potentials. That way the indigenous companies will be strong enough to employ more Nigerians. And by extension, they’d be making real and bringing closer to the people the practical and true meaning of the transformation agenda of President Jonathan.