Tenders open for NAE’s $13.5bn Zabazaba deep water project

 …to achieve FID in Q2 2017

 …first oil targeted in 2020

A fresh wave of work activities is set to begin in the Nigerian Content sector as the Nigerian Agip Exploration Limited (NAE) begins this April to receive commercial proposals for its Zabazaba deep water project, estimated to gulp $13.5bn in development.

The request for commercial tenders from bidders follows the finalization of the technical evaluation for the main packages of the project by the Nigerian Content Development and Monitoring Board (NCDMB) and NAE, with the aim to maximize local content. The packages included the Floating, Production, Storage and Offloading (FPSO) units, subsea, installation and rigs.

In a statement at the Board’s headquarters, Yenagoa, Bayelsa State on Friday, the Executive Secretary, NCDMB, Engr. Simbi Wabote explained that the Board fast tracked its evaluations and approvals on the Zabazaba project, with a view to increasing Nigeria’s crude oil production and creating opportunities for the growth and development of Nigerian Content.

According to him, the conclusion of the technical evaluation has paved the way for NAE to proceed with its plans to receive and evaluate the commercial bids, conclude negotiations and award contracts in the second quarter of 2017.

The Executive Secretary commended NAE for working harmoniously with the NCDMB, affirming that the company took onboard all Nigerian Content requirements.

He stated that NAE plans to achieve first oil in 2020, hence is determined to achieve the Final Investment Decision (FID) in the second quarter of 2017 and start execution of the project in the third quarter.

To bring the project to fruition, Wabote, admonished contractors to submit reasonable commercial bids, bearing in mind the prevailing price of crude oil and the fact that Zabazaba is the only major project that has reached execution stage at the moment. The deep water project was introduced a few years ago, but later suspended after cost projections and other push backs made it unviable.

He further praised NAE for its determination to pursue the project despite the challenges in the market and charged all stakeholders to support the execution as a fast track.

The Vice Chairman of NAE, Mr. Massimo Insulla had in a recent meeting with the Executive Secretary underscored the importance of Zabazaba project to Nigeria, all Joint Venture (JV) partners and stakeholders in terms of revenue for the government and job creation. It will also grow small and medium enterprises, expand existing facilities and develop the skills set of the work force.

Insulla extolled the NCDMB and NAE teams for concluding the technical evaluation at a speed that was unprecedented in the industry. He also advised other approving entities to adopt the NCDMB’s model while executing their evaluations of tenders and other processes.

The project is expected to develop oil and gas reserves in the range of 560 million barrels of oil equivalent. According to NAE’s project plans, the Zabazaba field will be developed initially. The Etan field will follow three years later and tied back to the Zabazaba FPSO from where the produced hydrocarbons will be processed and exported.

NCDMB and NAE had agreed that the project would utilize capacities and facilities that were developed on past projects. It aims to exceed the Nigerian Content performance achieved on the Egina deep water project, including the partial in-country integration and fabrication of the Floating, Production, Storage and Offloading (FPSO) platform.

NAE had in August and September 2016 organised six workshops for local and international contractors for the purposes of informing them of the Nigerian Content opportunities on different packages of the project.

The Executive Secretary visited some international operating companies (IOCs) in February where he confirmed that NCDMB had adopted mechanisms that accelerate processing time for projects. He also charged other entities involved in the contracting cycle to adopt similar strategies so the sector can achieve the six months contract processing target set by the Honourable Minister of State for Petroleum Resources, Dr. Ibe Emmanuel Kachikwu.