February 23, 2018

Investment opportunities seen in Nigeria’s $2bn rig repair market

RIG... Investment opportunities seen in Nigeria’s $2bn rig repair market... NAIJA INVEST

The Nigerian maritime and logistics services sector is brimming with untapped investment opportunities valued at over $2 billion for indigenous and foreign investors in the ship and oil rig repair business. The business also promises to be a key employment driver, BusinessDay findings have shown.

Findings also show that in terms of revenue and job creation, one repair facility is capable of domesticating over $200 million annually, and generating about N12 billion in Customs duties, millions of dollars for the Nigerian Ports Authority (NPA) as dues collected from vessels and rigs that call the facility, as well as about 1,000 direct jobs. The nation has a rig capacity of upto 100 but one the highest rig count remains 75 achieved in the third quarter of 2008. Currently it is estimated that the rig count has dropped significantly to less than 30.

Given the potential of up to 100 rigs and the cost of fixing a rig grossing into million dollars and the fact that Nigeria stands as the hub of the West African maritime and oil market, the potential for the nations rig repair market could be valued at over $2 billion.

The market opportunities for this sector, they say, are yet to be optimally tapped into by both indigenous and foreign investors, due to skill gap and the growing insecurity in the nations waterways. To this end, the economy is suffering high capital flight due to a dearth of investment in building repair facilities.

The business provides massive opportunities for operators in the maritime industry, as well as for steel industries, insurance, and the growing unemployment market. In 2012, over 100 rigs with billions of dollars worth of business were taken out of Africa for repairs, which is a huge loss for the continent.

RIG... Investment opportunities seen in Nigeria’s $2bn rig repair market... NAIJA INVEST

RIG… Investment opportunities seen in Nigeria’s $2bn rig repair market… NAIJA INVEST

Further findings have shown that there are about three ship and oil rig repair facilities in the country; the Lagos Deep Offshore Logistics Base (LADOL), Nigerdock, and Integrated Logistics Services (INTELS).

Analysts say that the business as a key employment driver, has the potential to create about 10,000 direct jobs and 5,000 indirect job opportunities, in line with the Local Content Act. This is only if Nigeria as the hub of maritime business in the west coast of Africa can invest significantly in developing more ship and oil rig repair and maintenance facilities.

With the three running ship and rig repair facilities, the business has created room for manpower training, as the present operators in country have resorted to building training schools for this purpose.

Amy Jadesimi, managing director of LADOL, an indigenous logistics company that is into rig repairs, said there are huge untapped opportunities in the business.


IMAGE: www.bp.com / www.offshoreenergy.dk

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