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Izomor: Nigeria Now Has Capacity to Fabricate FPSO Modules

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  • Izomor: Nigeria Now Has Capacity to Fabricate FPSO Modules

The Group Managing Director and Chief Executive Officer of MG Vowgas Limited, Mr. Godwin Izomor has declared that the Nigerian fabrication yards now have the capacity to fabricate the modules of Floating Production Storage Offshore vessels (FPSOs) and other complex offshore structures, stressing that the federal government should insist that complex fabrication jobs should be domiciled in-country in line with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010.

Speaking to journalists after a facility tour of his Mount Zion Fabrication Yard in Woji area of Port Harcourt in Rivers State, Izomor argued that the international oil companies (IOCs) should no longer export jobs abroad under the excuse that Nigeria does not have the capacity.

“Before now, barges and tug boats are imported from Europe and America under the flimsy excuse that Nigeria did not have the capacity. But today, we have fabricated a lot of equipment without any assistance from anybody. The barges and tugboats we use now in the industry are fabricated here in Nigeria. It is left for the government to support the local companies to insist that all the jobs must be domiciled in Nigeria. They should insist deliberately,” he said.

Izomor noted that executing oil and gas industry jobs locally would help to create massive employment opportunities in the country, adding that Korean giants that have operated in Nigeria for over 20 years have not built fabrication yards in Nigeria so as to continue to create job opportunities for their people working in the yards in their home country.

He said that his company in particular has the capacity to fabricate pressure vessels, modules, offshore structures, FPSO structures and topsides, stressing that his yard was built to curb capital flight.

“We built this place to reduce the amount of our money being taken abroad. Can you imagine that Korean companies have been in this country for the past 20 years but none of them has a yard in Nigeria that can even fabricate a container? The reason is that they know that if they build a yard here, their people will not be employed. So, it is our foolishness that kept Nigeria where we are today. Now, we have to believe in ourselves to start doing things in this country,” he said.

He argued that no fabrication yard in Nigeria has the kind of equipment in his yard.

“We are even bringing two major equipment. One is the oven. Our furnace has the capacity of 1,600 degree centigrade and is about 200 tonnes furnace. Then, till today, we still import the flanges from India and some other countries.

Even the other yards in Nigeria still import those flanges from abroad. But we are the only company that is going to have it here in Nigeria. We have plasma cutting machine that can cut up to 200-millimetre thickness of plates. We have davvy rolling machine that can roll up to 200 mm thickness plates. We have three automated welding machines that can weld aluminium and stainless steel,” he explained.

Izomor identified insecurity, poor electricity supply and lack of funding as some of the threats to local companies.

He also cited the failure of the government to stop the international oil companies from executing jobs outside the country as a major challenge.

According to him, the high cost of security in Nigeria has impacted negatively on the cost of doing business.

Izomor stated that he spends about N500 million yearly on security in his Port Harcourt yard and operation site in Bayelsa.

He urged the federal government to provide security by re-negotiating with the different ethnic groups agitating in the country.

“The government should re-negotiate with the different groups agitating for different reasons. I am a businessman and I don’t want to go into the demand of each ethnic group. It is not my business. My business is to do business while the government gives us security,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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