Aug. 16, 2019

Jejin Jeon


Jejin Jeon

Managing Director, Samsung Heavy Industries Nigeria

“2020 will be a meaningful year for Samsung.”


With over 20 years of shipbuilding and offshore marketing, project management and engineering division of Samsung Heavy Industries (SHI), including over 10 years of overseas assignments in Europe, Africa, and the Middle East. Appointed as a representative in SHI’s London office from 2005 to 2010, and the chief representative of SHI’s Lagos and Dubai offices from 2011 and 2016, during which he established a joint venture company in Lagos for local Fabrication and Integration works for the TOTAL EGINA FPSO project. He started with Samsung in 1996 as a sales engineer, rising to become Managing Director - Samsung Heavy Industries Nigeria.

How important is the Egina project within Samsung's global portfolio?

Egina is the first and largest floating oil production facility since the NOGICD Act of 2010, which mandates certain levels of operations that must be carried out in country. For Nigeria, the importance of Egina was that the country received a beautiful, modern fabrication and integration yard. That facility was the first-ever production facility Samsung built and invested in the African continent, so that was the important for us as a group. Through the Egina project, we made our footprint in Africa, and it was a stepping stone toward expanding our business in Sub-Saharan Africa. As a result of the project, Nigeria now does not have to go to Europe or Asia for fabrication and integration works, a huge win for local content.

Where do you see further opportunities for growth for Samsung in Nigeria?

We made an investment of almost USD300 million in Nigeria because of the country's potential for growth in the oil and gas industry. The global oil and gas industry had been suffering, with no major, large-scale oil and gas projects for the last five or six years. Nigeria's daily oil production fell from 2 million bpd to around 1.3 million. As crude oil represents almost 90% of government revenues in Nigeria, the falling oil production resulted in a severe economic recession. Together with next project, Bonga South West, these two projects cover the gap with around 350,000-380,000bopd. Egina alone represents 200,000 bopd, while Bonga South West will produce around 150,000-180,000bpd. With these two, Nigeria can increase its oil production rate from 1.3 million bpd to around 1.7 million. Therefore, these are critical projects for the Nigerian economy, which is why the government encouraged foreign investors with technology such as Samsung to come to Nigeria. During the Egina project, we set up a welding qualification center in our facility, one of the most advanced welding academies in Nigeria, and through this training school we have educated at no cost almost 600 young male and female welders who received international welding certificates, making the Egina project important also for educating local content.

What challenges did you have to contend with in executing the project?

The Nigerian content issue has been a challenge; there are still several companies with no adequate facilities, equipment, or expertise; however, because of the Nigeria Content Act, we were unable to use international contractors. We gave a great deal of work to Nigerian companies, though a certain number could not deliver the products within the budget and also under schedule. Nevertheless, this is a process, and we are pleased to be part of it and are committed to further developing local content. We will still work with some local companies that disappointed us and will encourage them to develop themselves in the course of the next project.

Many African countries are making great advancements in their exploration of oil and gas. How is Nigeria competing in terms of investment attractiveness?

There are only a few countries that can be compared to Nigeria; Tanzania and Mozambique are now rising markets in gas production. We have a contract with ENI together with INP and ENH, the Mozambique national oil and gas company. Mozambique, however, is still incomparable to Nigeria, in terms of oil & gas related infrastructure and statutory regulation for oil and gas as well. It needs to update it and is still in the initial stage of the learning curve. In Nigeria, there are many opportunities and challenges at the same time, though there is a long enough history in oil and gas expertise. It makes sense to invest in Nigeria, as it is the center of the ECOWAS countries; once we have facilities here, we can also cover other Economic Community of West African States (ECOWAS) countries including Ghana, Cameroon, Senegal, and Ivory Coast.

What is your outlook for Samsung in 2020?

2020 will be a meaningful year for Samsung. Our first investment was in 2013, and in 2019 we will fully deliver and finish our contractual obligation for the Egina project. We are waiting for another big project with Bonga South West, though such a large-scale project can only come into the market once per every five to six years. That is why we are also working on several small and medium scale projects that are in between 500 and 5,000 metric tons of steel works. Such work is of less interest to our headquarters; however, this facility in Nigeria is also able to accommodate such scale of steel works. In addition, this yard is well designed and developed to support the big projects of our headquarters.

In light of your current litigation case with your local partner LADOL, what is your outlook for 2020?

There was a clear breach in the agreement between Samsung and our local partner, LADOL, as well as violation of the Nigerian law from its side. However, thanks to the government's intervention in the case, our partner realized it is in serious trouble. We have just started our negotiation with LADOL in parallel with arbitration process in London and hope to continue our operation of our yard without interruptions, leading to more opportunity from potential clients. Once there are no uncertainties in our investment, the Samsung Group headquarters will realize that Nigeria and its government are reliable. Our outlook for 2020 much depends on the outcome of this arbitration process. If we lose our assets without our material defaults, then our group will definitely lose trust and interest in Nigeria, which will result in no more investment. However, if the case resolves in our favor, backed by clear legal and administrative counter-measure, we will have greater trust in Nigeria and its government and will continue to make our investments including the ship repair business, which is extremely promising in Nigeria as the leading oil and gas player in Sub-Saharan Africa. If everything goes well, we will keep being committed to the further growth of Nigeria and its people as well.