IN IT FOR THE LONG HAUL

Nigeria 2020 | ENERGY | INTERVIEW

Even before the Local Content Act, Saipem's motto of “Here to Stay" has always meant it invests heavily in developing a local knowledgeable workforce.

Walter Peviani
BIOGRAPHY

Walter Peviani has over 15 years of experience in the oil and gas sector. Under his lead from 2009-13, the commercial department of Saipem in Nigeria saw one of the most successful periods in history. Upon his return to Milan, he managed the commercial activities of the onshore E&C Division, whose activities related to the acquisition of new global projects he steered. In 2019, he led the commercial upstream department until his appointment as managing director of Saipem in Nigeria.

2019 was a great year for Saipem globally, with contracts amounting to USD400 million. Saipem Nigeria was also awarded the biggest ongoing project in the country. What does the LNG Train Seven Project mean for you?
2019 was indeed a good year both for Saipem worldwide and in Nigeria. As we speak, the Train Seven LNG plant project has not been awarded yet, but we have been selected and are waiting for the client to make the final investment decision. 2019 was especially good in Nigeria because we successfully completed the Egina Oilfield Project, the first megaproject done completely under the Nigeria Oil and Gas Industry Content Development Act. We have also just completed Shell's Bonga Northwest Project, while works for the Okpai Power Plant are still ongoing for Nigerian Agip Oil Company (NAOC) and are nearing completion of phase two. We are still working on the Dangote Fertilizer Project, which is a challenging but important project. It is the first megaproject completely awarded to a private, 100% indigenous client without the involvement of an international oil company or the Nigerian National Petroleum Corporation (NNPC).

As an international company, how does Saipem operate in a project that is 100% local?
The act mentioned before gives advantages to Nigerian companies, but it does not prevent foreign ones from winning contracts. The act tries to set the framework and basis for international companies to maximize their presence in the country and foster the development of local content. There are some required thresholds respecting the quantity of local content, but there is also the provision of waivers under the act when the capacity cannot be found within Nigeria. At Saipem, we see this law not as a barrier, but as a recognition of Saipem's investment: we have local content in our DNA wherever we operate in the world, and our operations are proof of that. In fact, this law was a positive surprise for us because we implemented local content long before the legislation came in. We have been in the country for more than 50 years. We have an almost 1-million-sqm fabrication yard in Port Harcourt that we built long before the law and its guidelines. It is a law that not only fosters the development of local companies, but also gives international companies the tools to work in Nigeria. In this way, it is also a recognition of the investment of companies like Saipem in Nigeria. In certain respects, the legislation has even boosted our competitiveness, because while some other companies had to catch up in terms of local content, we were already set up for it.

When embracing local content and local talent, what main challenges do you encounter?
The major problem is the availability of resources, both in terms of manpower and assets. But the biggest issue in Nigeria for me is the lack of continuous workloads in projects. Saipem has big shoulders, so it can cope for a period without projects; it has operations worldwide and has financial structures to manage this. But looking from the perspective of an indigenous contractor, they cannot invest if there are no jobs; so when projects come up, they do not have the specialized workforce and facilities to tackle the job. However, our motto is, “Here to stay." Yes, we face challenges, but if we do not take them on, they will always be there. If we continue to engage with and support a local company, they will be more efficient each time. If you want to come here to do one project and run away, local content will be a barrier. It will make you less effective. But, if you are a company that plans to stay, like Saipem Nigeria, the local content requirements give you more opportunities in the long run.