Dapo Oshinusi

Just as multinationals have learned to share the risks and rewards through multiple stakeholders, national operators will need to adopt the same approach if they are to venture into more costly and challenging opportunities.

Dapo Oshinusi Managing Director Mansfield Energy

in figures

Average cost of deepwater well in Nigeria$50 million-60 million

Domestic producers’ share of in-country production5 percent and growing

Integrated teams: The importance of integrated services in Nigeria

November 12, 2014

Mansfield Energy managing director, Dapo Oshinusi, talks to TOGY about the importance of integrated services in the oilfield services segment, the growth of domestic operators and how regulation under the country’s Local Content Act could be improved. Mansfield Energy is a Nigerian oilfield services company that focuses primarily on drilling and well completion services.

consortiums help to grow individual domestic oilfield services companies?

Integrated services are not new to the Nigerian market. The country’s first deepwater well, Shell’s Bonga project, was developed under an integrated service model, with all of the services companies that worked on the project coming together as one team. A similar structure was used for the development of Shell’s EA field in the late 1990s before it came on stream in 2002. ExxonMobil’s first deepwater well also adopted this approach.

Expanding this trend will be key to growing the domestic oilfield services sector. Capacity development will increase when the market sees a higher number of consortiums consisting of niche Nigerian oilfield services companies. These consortiums will be able to compete with multinationals in the delivery of services and the bidding process.

In 2014, all Nigerian oilfield services companies are niche players and are not able to compete across all services. It is obvious that in order to compete with multinational companies and be able to deliver big projects, local services companies must come together to form consortiums.

How do you compare the operating environments of brownfield onshore assets and greenfield offshore assets?

In most land- or swamp-based assets that have been producing steadily over time, the understanding of the reservoir and operating environment is already there. Reservoir pressure and characterisation are better understood, and generally, successful operating strategies have been established to optimise the asset’s productivity. You are not likely to use high-end technology because you already know the terrain and what is required to be productive. The operators and services companies that want to position themselves in that space have opportunities to save costs.


This approach is not applicable to deep offshore greenfield assets. The tendency is to use state-of-the-art, high-end technologies, as these frontiers are more challenging, and the assets are not yet fully understood from the standpoint of characterisation and operational efficiency. The reliance on technology has grown in recent times. In the past, the spread rate of a deepwater well in Nigeria would cost around $30 million. In 2014, the rate is around $50 million-60 million mostly because companies are drilling deeper wells in deeper waters.

What changes must be made in order to foster the capacity development of domestic operators?

While many onshore and swamp-based assets have been divested and sold to domestic companies, it is important to note that many of these companies do not have operatorship, which is mostly controlled by the government and oil and gas industry regulators. On the other hand, Nigerian exploration and production companies that are doing well have full control and operatorship. This is one of the major reasons why they have been able to build their capacity.

As the multinational companies move deeper offshore, Nigerian companies will take more control of swamps and onshore assets. The government should give more responsibilities to Nigerian companies as operators of these assets, as it would transform the industry and significantly increase productivity through local private sector capacity building.

Further down the line, Nigerian operators will begin to take on offshore assets, which have higher capital and technological barriers. Just as multinationals have learned to share the risks and rewards through multiple stakeholders, national operators will need to adopt the same approach if they are to venture into more costly and challenging opportunities.

In what areas can local content regulation and implementation continue to make improvements?

Nigeria’s Local Content Act has driven growth and capacity for many national services companies at all levels of the value chain. There is far greater local participation, both in the number of companies, as well as the aggregate capacity growth and stake holding of local companies. However, like most policy-driven initiatives in Nigeria, there is a lot of room to improve on the regulation and certification of services companies.

In 2014, everyone wants to get into the country’s oil industry and start their own company; that is fine but it would require strong regulation so that standards are maintained as we continue to build and grow the industry.

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