5 qs competency nigerian content law

7/30/2019 5 QS Competency Nigerian Content Law

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THE NIGERIAN CONTENT LAW:

OPTIMIZING OPPORTUNITIES FORTHE PROFESSIONAL QUANTITY

SURVEYOR.REQUIRED COMPETENCES OF QUANTITY

SURVEYORS FOR EFFECTIVE PARTICIPATION

IN OIL AND GAS INDUSTRYStan Onyeador

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Objectives of the PresentationTo provide an understanding of:

the Nigerian Oil and Gas Industry

the Nigerian Oil and Gas Industry ContentDevelopment Act 2010

areas of competence required for effectiveparticipation of quantity surveyors in Nigerian Oiland Gas Industry

the strategic objectives of effective participationsand,

how these strategic objectives can be attained.

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OIL AND GAS INDUSTRY

Oil and Gas is a unique industry.

It is very Capital Intensive

The life cycle takes several years to decades

Returns on investment high but takes long Secretive and controlled by cabals

Similar to drug business a sellers market Mega Money are involved

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OIL AND GAS INDUSTRY just as dope prices are set by dope dealers

(not by dope addicts), oil importing nationsmust buy their oil at prices set by competition

between oil exporting countries, not by

importing nations consumers, planners, or

politicians- Ivanhoe, (1990) in his article in the OIL and GAS JOURNALOct.29, 1990

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THE NIGERIAN OIL AND GAS INDUSTRY

Oil was first produced in Nigeria in Olobiri, Rivers

State in 1948, by Shell Controlled and dominated by foreigners

Almost all manpower, plant and equipment,

manufacturing, repairs, maintenance,engineering and designs are done abroad or inNigeria by foreigners

A major drain to the Nigerian economy thatdepends on Oil with contribution to nationalrevenue exceeding 90%.

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THE NIGERIAN OIL AND GAS INDUSTRY The turning point came in October 1996 when

the then minister for petroleum, Chief Dan Etete,

made his landmark speech, he asserted:

From now, foreign suppliers will have to bid andsupply through a local subsidiary or agent

Followed by government directive on mandatory40% and 70% local content by end 2006 and 2010respectively

Today, local fabrication yards and localindependent producing companies are beginningto emerge

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WHAT IS THE NIGERIAN CONTENT?:

the quantum of composite value added to,or created in the Nigerian economy through a

deliberate utilization of Nigerian human andmaterial resources and services . . withoutcompromising quality, health, safety and

environmental standards in order to stimulatethe development of indigenous capabilities

the development of local skills, technology

transfer, use of local manpower and localmanufacturing

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CONTENT DEVELOPMENT ACT, 2010

Signed into law on 22nd April 2010

The Act provides for the development of

Nigerian content in the Nigerian oil and gas

industry, Nigeria content plan, supervision,coordination, monitoring and implementation

of the Nigerian content.

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CONTENT DEVELOPMENT ACT, 2010 The NOGICD Act is divided into three parts:

Part I Nigerian Content Development in Oil &Gas Industry containing 68 clauses on theprovisions and applications of the Law

Part II Establishment of the Nigerian ContentDevelopment & Monitoring Board (NCDMB) with42 clauses on the structure, roles and activities ofthe NCDMB

Schedule Minimum percentage NigerianContent (NC) targets expected to be achieved percategory of activity in the oil and gas industry

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NOGICD ACT 2010:

TWO CRITICAL QUESTIONS

Having gone through the Act, two critical

questions came to mind:How can we measure effectively & efficiently:

the value of Nigerian Human resourcesemployed?

the value of Nigerian materials, assets and

services utilized?

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REQUIRED COMPETENCES OF QUANTITY

SURVEYORS FOR EFFECTIVE PARTICIPATIONIN OIL AND GAS INDUSTRY Knowledge is the key to effective participation of

quantity surveyors in the Nigerian oil and gasindustry.

Overview Knowledge of the Technical,Economic/Financial, Commercial, Organizational,

and Political aspects of oil and gas industry,prospects and projects: the Businessenvironment, Subsurface, Surface, Development

(incl. Drilling) Operations, Infrastructuregenerally, with special emphasis to Nigerian Oiland Gas industry are prerequisites.

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Quantity Surveyors need to: Understand the overall Oil & Gas life cycle from

exploration, development, production andabandonment(upstream) and refining(downstream)

Understand oil & gas project life cycle fromproject initiation to commissioning/delivery

Understand the activities performed at each

stage of the life cycle. Understand Oil & Gas EP processes, plants and

equipment, terminologies, etc

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Prerequisites for Effective Participation The above knowledge are prerequisites for

successful development of costs and schedules ofactivities and operations. Since one cannot costor schedule or procure what you do not know or

understand! Cost engineers must understand what they are

costing, project planners must understand whatthey are planning and procurement specialists orbuyers must understand what they arecontracting to purchase. It is as simple as that!

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Process Industries A process facility, such as oil production and

refining, can be viewed as consisting of twoparts: the process component and the facilitycomponent.

The process component consists mainly ofprocess equipment, instruments, and piping.

The facility component consists mainly of

buildings and structures, Ventilation and Air-conditioning, lighting, roads, gantries, etc.

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Process Industries: Process or Facility

Dominance. Some process plants are dominated by facility

component, such as pharmaceutical, whilstothers are dominated by the processcomponent. Petroleum exploration,

development, production and refining aredominated by the process component

The knowledge of quantity surveyors is vest in

the area of facility and probably nil in theprocess area

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Lets Test Our Knowledge: Quiz 1Process Component Quiz

What is Process Flow Scheme (PFS)?

What is Process Engineering Flow Scheme(PEFS)?

What is Process Utility Flow Scheme (PFS)?

5000 Naira for each correct answer!

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Lets Test Our Knowledge: Quiz 2Facility Component Quiz

What is an Architectural plan?

What is a Structural plan? What is a Plumbing plan?

Prize: 0 Naira for each correct answer!

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MAIN COMPETENCE AREAS I

General knowledge of oil and gas industry

generally with special emphasis to the NigerianOil and Gas industry.

Working Knowledge of Oil and Gas Exploration

and Production (EP) life cycle from exploration toabandonment

Detailed knowledge of Oil and GAS PROJECT LIFE

cycle from project initiation to project closeout.

Typical Process Facilities Project Team

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MAIN COMPETENCE AREAS II

Working Knowledge of Process Construction technologyand schematic designs of oil and gas facilities

Understanding of Flow Sheet symbols Engineering/Construction Project Planning and Control

Cost Engineering Principles and Practices

Contract Management in Oil and Gas EPIC type contracts: Engineer-Procure-Install-Commission

Tendering in Oil and Gas: Separation of Technical withCommercial tender in tendering and evaluation

Procurement in Oil and Gas Material , Plant & Equipment

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TYPICAL OIL & GAS EP LIFE CYCLE

A typical Oil and Gas EP life cycle consists of the

following stages: Exploration

Appraisal Development

Production

Abandonment (Decommissioning and

Restoration)

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Oil and Gas Exploration: Critical

QuestionsFor any oil and gas prospect exploration some

critical questions needs to be answered, such asthe following:

Where are the hydrocarbons?

How much volume is present?

How much volume can be produced?

At what rates ($) can it be produced? And lastly,what are the risks and uncertainties?

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TYPICAL OIL & GAS PROJECT LIFE CYCLE

A typical Oil and Gas Project life cycle consists of the followingstages:

IDENTIFICATION PHASE-PROSPECTIVE PROJECT

project initiation feasibility study

DEFINITION PHASE-FRONT END ENGINEERING DESIGN(FEED) development plan-surface and subsurface

basis of design

project specification

EXECUTION PHASE

detailed design

materials procurement construction

commissioning, start-up & handover, close-out & project debrief

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TYPICAL PROCESS FACILITIES PROJECT TEAM

A typical building or facilities project team is largelymade up of Architects, Structural Engineers, QuantitySurveyors, Civil Engineers and Services Engineers (orElectrical and Mechanical Engineers).

A typical Process facilities project team, is made upgeologists and geophysicists, petroleum and chemical

engineers, reservoir engineers, process engineers,piping engineers, Mechanical (Vessels and Machinery)engineers, Instrumentation engineers and Productiontechnologists.

Their influence or participation depends upon theprocess facility design in question. The processengineer prepares the process flow diagrams (PFDs).

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CONSTRUCTION TECHNOLOGY AND SCHEMATIC

DESIGNS OF OIL AND GAS FACILITIES, SUCH AS: Flow stations

Low Pressure Compression/ Booster Stations Central Processing Facilities

Oil and Gas Gathering Flow-lines

Oil and Gas Gathering pipelines

Major Oil and Gas Pipelines

Civil Infrastructure and PowerGeneration/Distribution

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ENGINEERING/CONSTRUCTION PROJECT

PLANNING AND CONTROL

Good understanding of the theory of Critical Path

Method and Project Evaluation and ReviewTechnique

Understand and use tools of CPM/PERT Planning

and Scheduling such as Primavera, MicrosoftProject, SAP Project Management, etc (PrimaveraProject Planner is the tool of choice in theindustry)

The Practice of Planning

The Practice of Scheduling

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COST ENGINEERING PRINCIPLES & PRACTICES

Elements of Cost: Cost dimensions, classifications, types, purchasecosts, materials, plant and equipment, labour/salary, overheads and

profit, subcontract, pricing, etc Elements of Analysis: Statistics and Probability, Economic and

Financial Analysis, Optimization,

Enabling Knowledge: Enterprise in Society, People and Organization,Organization Structure, Information Management, Quality

Management, Value Management and Environment, Health andSafety and Security.

Total Cost Management Process, Planning, Cost Estimating andBudgeting, Resource Management, Value Analysis and Engineering,

Risk Management, Procurement Planning and ContractManagement, Investment Decision Making, Project Implementationand Performance Management and Assessment

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STRATEGIC OBJECTIVES

The objectives of the strategy are:

To contribute our quota as quantity surveyorstowards the growth of the economy through thesuccessful implementation of the NigerianContent Development Act, 2010.

To ensure steady supply of qualified manpower inareas project management and planning,

contract and procurement management and totalcost management throughout the life cycle of oiland gas investment.

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STRATEGIC OBJECTIVES (contd)

To be seem by all the stakeholders and the Nigerianpublic as a key player in the Nigerian Oil and Gassector.

To contribute in devising a consistent, objective way ofmeasuring and reporting the value of Nigerian Human

resources employed and Nigerian materials, assets andservices utilized.

To provide the relevant statistics and data required by

the Act to ensure that the minimum Nigerian contentstated in schedule is enforced.

To create jobs and future for the younger generation.

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STRATEGY FOR BRIDGING THE


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CONPETENCE GAP NIQS/QSRBN should develop a measurable plan

and provide sustainable training/development forNigerian Quantity Surveyors.

Short term strategies NIQS/QSRBN to set up a team made up of mainly QSs

experienced in Oil and Gas operations to drive theimplementation of NCDOGI as it affects the QS

Training Programmes by NIQS, QSRBN, and privatetraining outfits Formal

Informal: On-the-job training

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CONPETENCE GAP (contd) Medium Term Strategies

Professional Diploma or Certificate Programmes

Long term strategies

Comprehensive review of QS course content to

deemphasize building construction and emphasis

engineering construction (Oil, Gas, Power,

Telecoms, etc)

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5 qs competency nigerian content law

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