CNL: Splashing $10bn on Nigerian suppliers, service providers in 10 years




Benjamin Umuteme writes on how Chevron Nigerian Limited has impacted Nigeria’s economy since its operation in teh country.  

December 1, 2021, Chevron Nigeria Limited (“CNL”), operator of the joint venture with the Nigerian National Petroleum Company Limited, (“NNPC”) – “NNPC/CNL JV” – marked 60 years of its operations in Nigeria.  It was on December 1, 1961 that Gulf Oil Company, a subsidiary of Gulf Corporation, was registered in Nigeria and obtained its first prospecting license. Gulf Oil Company is the precursor of CNL.

Impacting lives 

For 60 years, Chevron has made significant contributions in Nigeria, not only as one of the country’s largest oil and gas producers, but also as one of its largest investors.  Beyond its core oil and gas business, Chevron has made significant contributions to the socio-economic development of Nigeria for six decades. CNL operates under a joint-venture arrangement with the NNPC for its onshore and offshore assets in the Niger Delta region. Chevron also has extensive interests in multi-partner deepwater operations, the Escravos Gas-to-Liquids (“EGTL”) facility and the West African Gas Pipeline Company. 

Chevron’s partnership with the people and government of Nigeria creates positive economic ripple effects.

“Our long and deep commitment to Nigeria through our significant investments in the economy and social development of the country contribute significantly to Nigeria’s Gross Domestic Product,” said Rick Kennedy, CNL’s Chairman and Managing Director at a recent media parley.

 Recognition

In February 2018, at the Nigerian International Petroleum Summit (“NIPS”) in Abuja, CNL received an industry award as the highest contributor of domestic gas in Nigeria.  Kennedy explained that “CNL’s gas strategy is to end routine gas flaring and build a profitable gas business through a portfolio of projects that fulfill the NNPC/CNL JV’s Domestic Gas Supply Obligation (“DGSO”) and support the Nigerian Gas Master Plan and the National Gas Policy.

“We continue to invest in our operations to improve environmental performance while working with industry to develop new innovations and best practices. CNL has reduced routine flaring by over 95% in the past 10 years and has remained a pioneer and top supplier of on-spec gas, while maximizing supply into the Nigerian domestic market. CNL works very closely with its joint venture partner (NNPC), pertinent government agencies and industry stakeholders to advance domestic gas supply. Very notable are the Gas Sale and Aggregation Agreements (“GSAAs”) with Egbin Power Plc, Dangote Fertilizer Limited, and Olorunsogo Generation Company Limited.”

Rick further said the Escravos Gas Project (“EGP”), and gas gathering, and processing facilities invested in by the NNPC/CNL JV, placed CNL as one of the pioneers in creating a practical and economic solution for gas flaring in the Nigerian oil and gas industry.

“EGTL enhances diversification and commercialization of gas resources and continues to provide great value to Nigeria through its high-quality products.” he further highlighted. 

On lower carbon  

The CNL boss also revealed that “Chevron is taking actions globally to create a lower-carbon future by reducing the carbon intensity of our operations and assets, increasing the use of renewables and offsets, and investing in low-carbon technologies.  

 “Chevron is supportive of Nigeria’s commitment towards energy transition with special focus on both clean energy technologies and natural gas. Hence, we support the Decade of Gas initiatives lead by the Ministry of Petroleum Resources and other important steps towards reforms in the oil and gas industry.”

Local Content

Chevron has had a long history of commitment to Nigerian Content development. Chevron companies in Nigeria had developed and imbibed the Local/Nigerian Content development philosophy well before the April 2010 enactment of the Nigeran Oil and Gas Industry Content Development Act (“NOGICD Act”).  Chevron has helped in building the capacities of several Nigerian businesses by providing training, contracts and procurement opportunities to Nigerians on all projects in our operations.

For the last 10 years, CNL has spent an estimated annual average of $1 billion on Nigerian suppliers and service providers.  CNL’s MD emphasizes that “Chevron does all this, not because we are compelled to, but because it is the right thing to do.”

Chevron’s Agbami project set industry standards by fabricating more than 10,000 tonnes of steel with Nigerian fabrication companies, the highest ever recorded in Nigeria. Chevron also trained 105 Nigerian engineers from 21 engineering companies in South Korea. The Escravos Gas Project (EGP) has employed over 1,800 Nigerians and sourced millions of Dollars’ worth of services (engineering, procurement, fabrication, marine, etc.) locally. Similarly, the EGTL project provided employment to more than 15,000 Nigerians during the construction phase of the project. In addition, the project awarded huge sub-contracts to local community contractors, sent 234 Nigerians on a 30-month training program in South Africa at the synthetic fuel facilities of Sasol Limited and trained over 7,000 Nigerians in technical skill crafts, plant operation and maintenance, business and project management, logistics and supply chain management, as well as gas tungsten arc welding processes.

 Social investments

Rick also espoused Chevron’s giant strides in social investments in communities where the company operates and elsewhere in Nigeria. “Chevron companies in Nigeria recognize that their business success is linked to society’s progress. That explains why Chevron works with the communities, government, and other partners to support strategic social investments in health, education and economic development, and other focus areas such as the environment and sports development.  As part of the company’s forward-thinking approach, in 2005, the NNPC/CNL JV, partnered with others to pioneer the Global Memorandum of Understanding (GMoU) participatory partnership model for community driven development,” he stated.

He emphasized, that in the past 16 years, the NNPC/CNL JV has spent billions of naira in funding the GMoU and the model has recorded significant achievements, especially in areas of education, health, economic development and capacity building. Through the GMoU, the communities, represented by the different Regional Development Committees (“RDCs”) have executed a wide range of community development projects in the communities neighboring CNL’s operations. In addition to hundreds of infrastructure projects implemented through the GMoU, it has helped to reduce potentials for conflicts, enhanced peace-building process, and human capital development – which are helping to sustain wealth creation in communities around CNL’s areas of operations.”

As part of the GMoU, CNL established the Participatory Partnership for Community Development (PPCD), which has built the capacity of the Non-Governmental Organizations, community leaders and the people through various programmes.

Health/education

The NNPC/CNL JV has embarked on several health projects and programmes in the past 60 years both in the communities and other parts of Nigeria. In 2002, CNL launched the River Boat Clinic to serve the health needs of communities in the western Niger Delta.  Over three-quarter of a million people benefitted from the healthcare programme before it was discontinued in 2020.

CNL also built and donated a DNA Molecular laboratory to the University of Lagos Teaching Hospital, and the facility is very significant to medical research in Nigeria. The NNPC/CNL JV also recently donated a Polymerase Chain Reaction (“PCR”) laboratory to Warri Central Hospital to support the Delta State government in the fight against the COVID-19 pandemic, in addition to other industry-collaborations.

Furthermore, CNL is also committed to the fight against malaria through initiatives such as the Roll Back Malaria programmes, Malaria in Pregnancy, Training of health workers, distribution of Intermittent Preventive Treatment and Artemisinin-based drugs, and Long-Lasting Insecticide Treated Mosquito Nets. Over 46,000 people have benefitted from the malaria prevention education and/or treatment since 2014.

Chevron, the largest contributor to Global Fund against HIV/AIDS, malaria and TB since January 2008, has also supported Global Fund with a total investment of US$60 million in Nigeria, Angola, Indonesia, the Philippines, South Africa, Thailand, and Vietnam. In Nigeria, Chevron’s partnership has contributed to helping more than a million people living with HIV access lifesaving antiretroviral therapy.

 In the area of education, the CNL is supporting  development of education in the Niger Delta region and across the country through development of education infrastructure, capacity building and scholarships. The scholarships include: the NNPC/CNL JV national university scholarship and the community scholarship program which caters for students in both secondary and tertiary institutions from communities in CNL’s areas of operations. Additionally, CNL awards scholarships to visually impaired students to enhance their access to quality education. Over 23,000 people have benefitted from the company’s scholarship programs which include scholarship for community postgraduates’ scholars in Nigeria and foreign universities.

 Since inception of the Agbami Medical and Engineering Professional Scholarship programme in 2009, over 16,500 students from all the states of Nigeria have benefitted from the scholarship, out of which 715 students have graduated with first class degrees. Chevron and its Deepwater parties have continued to invest in education infrastructure. As at today, the parties have executed 39 Science laboratory complexes and 25 conventional and hybrid libraries across the country. Also, Chevron and its partners embark on a wide range of activities to encourage students to develop interest in key subjects of science, technology, engineering, and mathematics (“STEM”) and, ultimately pursue STEM courses and career.

 Poverty

On poverty, the CNL boss said the company  launched the United States-based NDPI and its Nigerian counterpart, PIND in 2010 to develop and implement interventions aimed at sustainably reducing conflict and poverty in Nigeria’s Niger Delta region through multi-stakeholder partnerships. The Foundations were started with an initial US$50 million investment in 2010, with Chevron committing an additional US$40 million in funding to NDPI and PIND from 2014 through 2019, and a further US$25 million in 2020 for a third, five-year phase through 2024

Prospects of oil&gas business

On the whole, the CNL expressed optimism on  the future of the oil and gas business in Nigeria as the opportunities are enormous.“Chevron takes a long-term view of Nigeria. The company has been making significant investments in the country for 60 years and it expects to do so for many more years to come. With the right policies, laws and regulations, the enormous potential of Nigeria’s oil and gas sector can yield even greater benefits for all,” Rick assured.

Related content you may like