Nigerian Oil and Gas Market Subsea UK – 2014 uzoka.pdf · Fabrication, erection and assembly of...
Transcript of Nigerian Oil and Gas Market Subsea UK – 2014 uzoka.pdf · Fabrication, erection and assembly of...
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Nigerian Oil and Gas Market
Subsea UK – 2014
AUSTIN UZOKA MANAGER, NIGERIAN CONTENT DEVELOPMENT (NCD)
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Definitions and Cautionary Note
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Companies over which Shell has joint control are generally referred to “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”. In this presentation, joint ventures and associates may also be referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2012 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, February 5, 2014. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.
We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
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Outline
NCD AS PIVOT FOR GDP & FDI GROWTH NCD VALUE PROPOSITION SHELL’S LOCAL CONTENT APPROACH THE DEEPWATER POTENTIALS PROJECT PORTFOLIO THE GLOBAL NIGERIAN
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Nigerian Content - Pivot for GDP & FDI Growth
OUTCOMES
GDP & FDI GROWTH
AGENCY & CAPITAL FLIGHT
Domiciliation Domestication
Compliance with Local Content Law
Capacity Development Initiatives
Oil and Gas Sector
LCD
NOGICD Law
Sustained Economic
Growth Employment Infrastructural
Development Stability Improved Standard of Living
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Nigerian Content Value Proposition
Sustainability
Productive employment
Security
Less pressure on income
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Nigerian Content Collaboration Framework
Collaboration Framework
• Expedite approval process • Support long term contracts• Provide credible industry data • Support funding • Liaise with other government
agencies
• Provide technical specifications
• Provide off-take commitments to credible local firms
• Provide other support (Financing, Market Demand Analysis, etc.)
• Enact / amend applicable laws • Provide incentives (tax breaks,
concessionaries duties, etc.)• Infrastructure development• Unblock impediments Government
and Legislature
NCDMB / NNPC-
NAPIMS / DPR
InvestorsApplicant(s) • Build sustainable business
models and bankable plans to build required capacity
• Create sustainable partnerships and synergies
• Demonstrate evidence of minimum investment commitment
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Bonga South West – Opportunity, Dimensions and Scope
Major deepwater oil development, 130km offshore Nigeria, in 1160 – 1340 metres of water
Project Maturation Phase • Project now in the Define Phase – PreFEED,
FEED, Technical & Commercial tendering
• Target to achieve earlier project sanction (FID) by Dec 2014
Project Scope as per the FDP & BFD • Subsurface & Wells
– Phase 1: 24 wells (12 producers/12 water injectors) pre-FOD
– Phase 2: Additional 20 wells (10 producers/10 injectors) post-FOD
• Subsea & Host Facilities
— Shell Operated Regional FPSO – 2.5 MMbbls storage
— Oil 225 kbopd, WI 400 kbwpd, gas 270 MMscf/d
— 5 Prod & 8 Water Injection drill centres
Project Schedule – P50
DG1 Mar-04
FID Q1-15
DG2 May-05
FEASIBILITY
Time Now
SELECTION DEFINE EXECUTE
FOD Q1-20
VAR 3 Oct-11 DG3 Dec-11
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Material Procurement
Key procurement Items : Steel Pipes, Tubular Steel Plates, Flat sheets, Sections Steel Ropes Induction Bends Forgings Valves (Topsides & Subsea) Cables (High & Low Voltage) Heat Exchangers Cement (Portland & Hydraulic) Protective Paints
Linepipes
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NC Opportunities in Fabrication & Construction
Fabrication, erection, and assembly of Topsides modules (Process & Storage) Topsides Integration
Fabrication, erection and assembly of subsea manifolds Fabrication and assembly of flowline termination assemblies, in-line termination assemblies, etc. Thermal Insulation of Production Manifolds
Double/Quad jointing of flowline, pipe spool fabrication. Flowline & Well Jumper Fabrication, Assembly and Testing Insulation coating
In country tree systems assembly. Fabrication of tree systems ROV panels. Fabrication of tree system frames. Thermal Insulation of production trees. Systems Integration Tests (SIT)
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NC Opportunities in Fabrication & Construction Cont’d
Machining of tubing head frames and ROV panels
Fabrication of suction anchor piles for subsea manifolds foundations, SPM and FPSO mooring foundations
Fabrication, erection, and assembly of SPM buoy
Test Labs: Fatigue, NDE, Welding Qualifications, etc.
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NC Opportunities in Installation & Pre-commisioning
Pre-com equipment & expertise. Tugs / Remotely Operated Vehicles (ROV) Support Support Vessels Logistics Base & Handling Barges Floatels Logistics Support Vessel Offshore Mechanical, I & E, Hook-up
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Major Projects Portfolio
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Start up Project Country Shell share
(direct & indirect)%
Peak Production
kboe/d
LNG 100% Capacity
mtpa
Legend Theme Shell Operated
BONGA NORTH WEST NIGERIA 55 40 Deep-water FORCADOS YOKRI INTEGRATED PROJECT (FYIP) NIGERIA 30 90 Longer term SOUTHERN SWAMP AG NIGERIA 30 85 Longer term 2013-14
Phase Project Country
Shell share (direct & indirect)%
Peak production 100% kboe/d
LNG (100%) capacity mtpa Legend Theme
Shell operated
CONCEPT SELECTION BONGA NORTH NIGERIA 55 200 Deep-water
BOSI FIELD DEVELOPMENT NIGERIA 44 130 Deep-waterNIGERIA NLNG TRAIN 7 NIGERIA 26 220 8.4 Longer term ZABAZABA NIGERIA 50 170 Deep-water
BONGA SOUTH WEST/APARO NIGERIA 44 200 Deep-water ERHA NORTH PH 3 NIGERIA 44 60 Deep-waterGBARAN UBIE PH 2 NIGERIA 30 165 Longer term
DESIGN
STRONG PORTFOLIO OF PRE-FID UPSTREAM OPTIONS POTENTIAL 2014- 2020 STARTS-UPS
Opportunities for Original Equipment Manufacturers Initiative
Developing new opportunities to localize the supply chain for oil & gas industry in Nigeria with support from NAPIMS; by liaising with industry suppliers to establish local presence & capitalize the current gaps related to Nigerian local content act. The current annual demand from Shell Nigeria can be estimated at $30m for valves, $40m for IAE, $20m for piping, fittings and flanges from production and projects.
Key Activities and Drivers
Capitalize the large demands from Nigerian oil & gas industry by setting up services, workshops, manufacturing and stocking facilities in the country. Deepen implementation of local content act by filling gaps for Nigerian content attainment. Utilize the favorable tax regime for foreign direct investment.
What Shell can bring
Shell can lead the exercise from the industry perspective with support from NAPIMS.
Shell can offer for lease residential units in Port Harcourt for expat staff of OEMs and allow them join our routine bus shuttle for OEMs that choose to locate their facilities in our Industrial Area (IA).
Shell can continue to produce large demands for equipment in Nigeria owing to its current and future operations.
What we need from the OEMs
Willingness to explore opportunities for business development in Nigeria. Commitment to set up in-country facilities. Series of activities towards maintenance, assembling, manufacture of components and “ following after market support”.
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The Global Nigerian, 2014 – Aberdeen
COLLABORATION AWARENESS KNOWLEDGE
SHARE LOCAL SOLUTIONS
Interactive Networking by Nigerians in the Diaspora and Nigerian companies