ABOUT THIS COUNTRY CASE STUDY
The present report is part of the Sustainability case studies that Saipem started to publish in 2003, being
aware of the importance of informing stakeholders on the sustainability approach Saipem implements in the
areas of the world where it operates.The case study focuses on a specific country or area
and describes the principles, activities and performance that has been achieved by Saipem and its Operating
Companies toward sustainable development.The report has been structured to provide easy access
to key indicators and information. It is divided into two parts: the first part gives an overview of Saipem and its business around the world, while the second part
focuses on the specific country. This latter is composed by a first section describing the country, a second
section describing Saipem presence in the country and its sustainability approach, and finally a third section
reporting the overall sustainability performance of Saipem, addressed to different stakeholders.
The report has been structured using an approach consistent with the GRI Guidelines, identifying those
indicators more representative of Saipem presence in the country.
The Sustainability Case Studies, together with the annual Saipem Sustainability Report and the Project
Sustainability Case Studies, represent the main Saipem tools to communicate its vision for Sustainability to all
its stakeholders.
METHODOLOGY
This Local Sustainability Report has been developed in accordance with the principles of materiality,
stakeholder inclusiveness, sustainability context and completeness. As for the yearly Corporate Saipem Sustainability Report, this Local Report is strongly
focused on stakeholders. All relevant and legitimate stakeholders in Nigeria have been identified and their
needs analysed. This Report is intended to describe Saipem performance and its engagement with the
Nigerian stakeholders.A set of Key Performance Indicators (KPIs) was
selected to support the information to be provided to stakeholders. Data are taken from the information
systems used for the general management and accounting of companies’ operations or from public
data made available by recognised Institutions.This Local Sustainability Report illustrates Saipem
activities in Nigeria, covering all projects conducted by Saipem Contracting Nigeria Ltd and Saipem Nigeria Ltd, which represents the consolidation area of the
data. All data have been reported for 2008 and, when available, for previous financial years.
INDEX
1 Message from CEO 2 Overview of Saipem in Nigeria 3 Letter from the Management
Part 1
5 Introduction to Saipem 6 Saipem at a glance 8 Saipem in the World 10 Saipem Sustainability Talent 10 Sustainability Principles 11 Sustainability Organisation
Part 2
12 Nigeria 12 Country Overview 12 Social Overview 12 Economic and Energy Overview 13 Environmental Aspects
15 Saipem presence in Nigeria 16 Main projects 17 Company Organisation and Management System 18 The Approach to Sustainability 19 Local Content 19 The Approach for Security
20 Sustainability Performance 20 People 20 Total Workforce 20 People management 21 Training 22 Safety 24 Health 26 Industrial relations 26 Environment 27 Waste 28 Climate Change 28 Environmental Impact Assessment 29 New Sewage Treatment Plant 29 Painting and blasting operations in an environmental friendly manner 29 Customers 29 Subcontractors & Suppliers 30 Local Communities
32 Future Challenges 32 Glossary & Acronyms
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MISSIONPursuing the satisfaction of our clients in the energy industry, we
tackle each challenge with safe, reliable and innovative solutions.
We entrust our competent and multi-local teams to provide
sustainable development for our company and the communities in
which we operate.
local stakeholders clearly requires a comprehensive approach. In addition however, the diversity of the projects and the specificity of the countries and contexts in which they are performed demand a distinctively local approach to Sustainability.
Thus we publish ‘Case Studies’; effectively ‘Local Sustainability Reports’. These ‘Case Studies’, which are frequently requested by local stakeholders, are proposed by Saipem to promote open dialogue in support of our local relationships and our drive to operate in an increasingly sustainable manner, globally and locally.
As an international oil & gas contractor with more than 37,000 employees and a presence in more than 50 countries, Saipem plays a significant role in its market and in the economic welfare and development of the communities in which it operates.
We consider Sustainability as truly part of our business. Our commitment is therefore to create long-term value by working with our stakeholders, especially our local neighbours, towards shared goals.
Given the range and complexity of our activities, our engagement with
MESSAGE FROM CEO
Pietro Franco TaliPietro Franco Tali
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OVERVIEW OF SAIPEM IN NIGERIA
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‘Here to stay’: promoting Local Content Saipem is working on the promotion and development of local content with the creation of long term investments, partnership with local companies and the maximisation of projects’ value executed in country, in term of local employment and procurement of materials and services.
2,789 Number of Nigerian employees
89%Percentage of Nigerian employees vs total workforce in Nigeria
125.9 M€Total ordered to Nigerian Vendors
12Number of Memorandum of Understanding in place with Local Communities
(Data 2008)
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Gulf of Guinea
Niger
Cameroon
Chad
Benin
Lagos - Head OfficeLagos - Head Office
ABUJA
Niger River
Benue River
Cross River
NIGERIA
Warri - Satellite Office
Onne - Logistic BasePort Harcourt -
Rumuolumeni Base
Lake Chad
Warri - Satellite Office
Onne - Logistic BasePort Harcourt -
Rumuolumeni Base
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Saipem is proud to have a strong presence in this Country.This was clear to me since I started my job here as Managing Director and it is
well known to our local stakeholders and clients.But I wanted to make a step ahead through this Sustainability Case study. I would
like to assure our shareholders that Local Content is a key success factor of our activity.
In the next pages of the report Saipem is demonstrating that its model based on local content is the best one in term of efficiency, reduction of execution/
delivery time, cost optimization and HSE management.Our slogan ‘here to stay’ is clear, and is demonstrated by our decision to maintain
our presence in Port Harcourt area, despite the security situation, the ISO 14001 and OSHAS 18001 certification obtained, the training programs and so on.
We now need to improve our measurement capabilities and to compare our local content data with our international competitors in the Country but also with the national companies. This will support us in the definition of new areas of
improvement.Moreover the picture of the Country included in this report underlines the
growing engagement of the local authority to increase the Nigerian Content in the business.
The Nigerian National Petroleum Corp (NNPC) is boosting international companies to increase their capability to add or create value in the Nigerian
economy through the utilisation of Nigerian human and material resources for the provision of goods and services.
This Country understood that the local content target for the international companies is a new tool to be part of the business and increase the Country
capabilities in the different sectors.The company results and the external pressure rewarded Saipem efforts to
integrate its activities in the Country. I am sure this is the way to be followed also in the future.
Giuseppe SuraceManaging Director SCNL
Group Country Manager Nigeria
LETTER FROM THE MANAGEMENT
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Saipem is an international company employing over 37,000 people from around 115 nationalities. The major part of its human resources (85% in 2008) is locally employed.
Saipem, 43% owned by Eni, is an international group with a strong bias towards oil and gas related activities in remote areas and deepwater. The Company began operations in the 1950s and it is now a leader in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and the execution of large-scale offshore and onshore projects.
The organisation, since providing many different kinds of services, has been rationalised into three global Business Units: Onshore, Offshore, Drilling. It enjoys a superior competitive position for the provision of EPIC/EPC services to the oil industry both onshore and offshore; with a particular focus on the toughest and most technologically challenging projects – activities in remote areas, deepwater, difficult oil. The Group is a truly global contractor, with strong local presence in strategic and emerging areas such as West Africa, Americas, Central Asia, Middle East, North Africa and South East Asia.
INTRODUCTION TO SAIPEM
Operating and Engineering Hubs
Engineering Centres
Yards and Main Logistic Bases
Other Main Areas and Representative Offices
2%
2%
3%
23%
3%4%
5%7% 7%
7%
8%
10%
19%
Saipem workforce distribution by nationality (2008)
Philippines
India
Kazakhstan
NigeriaItaly
Russia
Peru
United Kingdom
Others (<2%)
France
Saudi Arabia
AngolaVenezuela
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SEMISUBMERSIBLEPIPELAYING VESSEL
J-LAYING VESSELSEMI-SUBMERSIBLE
CRANE ANDPIPELYING VESSEL
DRILL SHIP
based at the core of major oil & gas provinces. These encompass its wholly
owned subsidiary Intermare Sarda in Italy, the Rumuolumeni yard in Nigeria,
the Petromar Soyo yard in Angola, the Boscongo Pointe Noire yard in
the Republic of the Congo, the Kuryk yard in Kazakhstan, the BOS Shelf yard
in Azerbaijan, and the Sharjah yard in the UAE. The current potential of Saipem fabrication facilities exceeds
an aggregate of 130,000 tonnes per annum.
FPSO units are part of Saipem’s offshore construction line of products, both as new-builds, delivered turnkey to the customer, and as tanker conversions
leased to and operated for the customer.
DRILLING Saipem is presently contracted to a
number of major oil companies, carrying out important drilling programs in
Europe, FSU, North and West Africa, Middle and Far East and Americas. It
has operated for several oil companies and government agencies, gaining
international and qualified recognition. Drilling services continue to be
distinctive, working in many of the oil
OFFSHOREHaving handled ground-breaking
projects ranging from inter-field flowlines to major trunk line systems totalling some 23,000 km in length
since the late 1950s, the company has continually updated and advanced
its capabilities to anticipate the ever increasing demands of the market.
Saipem’s pioneering work in pipeline installation is matched by its experience in installing offshore platforms around
the world, in which it has mastered both the heavy lift and the float-
over techniques. Over the last ten years, Saipem has completed some
120 offshore construction projects – including modular deck drilling and
production platforms, integrated deck platforms, wellhead platforms,
accommodation platforms, FPSOs (Floating Production Storage and
Offloading) – increasingly often in an integrated contractor role.
Since the 1970s, Saipem has also been involved in the construction of marine terminals, conventional buoy moorings, jetties and piers. Saipem’s
offshore construction EPIC capabilities are also supported by significant
and growing fabrication capabilities
SAIPEM AT A GLANCE
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PIPELAYING
REGASIFICATION PLANT
POWER PLANT
DRILLING RIG
JACK-UPDRILLING RIG
SEMISUBMERSIBLEDRILLING RIG
and construction, particularly cross-country, has historically been one of the mainstays of Saipem’s business. In this market, Saipem ranks among the largest contractors in the world, having laid a record 62,000 km of pipelines on five continents. Onshore activities include also oil refining and the monetisation of gas through processing and into chemicals. The former Snamprogetti business has designed and built 37 grass-roots refineries, more than 500 process units and more than 400 plants worldwide to produce chemicals from natural gas. In recent years, the company has also designed and constructed more than 40 power plants, applying various process solutions and turbines, as well as three Integrated Gasification Combined Cycle plants, two of which are the world’s largest, with a total capacity of approximately 5,000 MWe. Saipem plays a significant role in the design and execution of a large-scale civil infrastructure projects and also offers integrated environmental remediation services, such as those relating to soil and ground water, for contaminated sites of all types, both decommissioned and operational.
& gas industry’s ‘hotspots’, frequently in synergy with the group’s onshore and offshore activities.Over many decades of performance, Saipem has drilled over 6,400 wells, 1,600 of which have been offshore, totalling an overall depth of about 16 million metres.Saipem operates both in shallow and deep water using jack-ups and semisubmersible units.
ONSHORE
Saipem offers a complete range of project definition and execution services, from feasibility and front-end studies to design, engineering, procurement and field construction (EPC). It offers these services in virtually every world market, leveraging its specialised skills across the most significant product lines in the oil, gas, refining, chemical and power industries. The company offers integrated solutions ranging from upstream engineering to turnkey delivery of complex facilities, including onshore production, gas treatment and processing plants, pumping and compression stations and terminals. Land pipeline design
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REST OF EUROPE 2006 2007 2008Revenues (€ million) 1,093 954 878
Investments (€ million) 17 14 9
Workforce (units) 5,610 3,618 4,793
Local Workforce (% of total) 86 85 73
Energy consumption (toe) 12,222 44,386 63,095
HSE Training (hours) 27,105 43,991 29,444
AMERICAS 2006 2007 2008Revenues (€ million) 545 745 590
Investments (€ million) 14 188 233
Workforce (units) 2,730 4,021 4,562
Local Workforce (% of total) 74 71 87
Energy consumption (toe) 12,222 52,392 115,130
HSE Training (hours) 60,497 68,401 74,357
WEST AFRICA 2006 2007 2008Revenues (€ million) 1,570 1,677 1,950
Investments (€ million) 31 54 49
Workforce (units) 5,170 5,814 6,471
Local Workforce (% of total) 69 69 67
Energy consumption (toe) 10,043 52,744 56,633
HSE Training (hours) 37,861 102,014 146,953
NORTH AFRICA Revenues (€ million)
Investments (€ million)
Workforce (units)
Local Workforce (% of total)
Energy consumption (toe)
HSE Training (hours)
SAIPEM IN THE WORLD
ITALY Revenues (€ million)
Investments (€ million)
Workforce (units)
Local Workforce (% of total)
Energy consumption (toe)
HSE Training (hours)
Additional data for investmentsFurther investments not allocated by Areas were (in € million) 458 in 2006, 1,184 in 2007 and 1,463 in 2008.
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2006 2007 2008372 727 1,475
7 42 8
1,231 1,690 1,783
47 43 55
11,435 33,160 35,991
7,441 36,765 47,626
SAUDI ARABIA 2006 2007 2008Revenues (€ million) - 1,912 1,599
Investments (€ million) 9 65 81
Workforce (units) 2,730 4,937 5,300
Local Workforce (% of total) 97 97 96
Energy consumption (toe) 35,125 59,322 64,439
HSE Training (hours) 7,432 89,275 210,281
REST OF ASIA-PACIFIC 2006 2007 20082006 2007 2008Revenues (€ million) 2,112 1,433 1,375
Investments (€ million) 2 4 26
Workforce (units) 2,575 2,429 3,533
Local Workforce (% of total) 54 65 66
Energy consumption (toe) 11,166 45,997 34,682
HSE Training (hours) 46,824 73,365 86,170
2006 2007 2008773 1,051 1,135
8 18 68
5,080 5,295 5,982
98 98 91
13,371 69,382 14,566
5,143 8,441 125,996
CIS 2006 2007 2008Revenues (€ million) 1,052 1,031 1,092
Investments (€ million) 68 75 107
Workforce (units) 6,641 6,486 5,566
Local Workforce (% of total) 83 78 72
Energy consumption (toe) 77,183 65,738 86,502
HSE Training (hours) 405,012 369,070 325,588
Additional data for 2006In 2006, some data were allocated to vessels (seaworld), including a total workforce of 3,147 units, an overall energy consumption of 187,598 toe and a total 64,595 hours of HSE training.
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Saipem’s business strategy is based on the creation of long-term value by
contributing to the development of local communities where the Company
operates. The Company believes that a correct,
open and cooperative relationships with all the stakeholders is vital for the
success of each complex project Saipem carries out, frequently in very remote
and most challenging areas.Saipem has a presence in many locations
around the world, operating with a decentralised organisation in order to
respond to local needs and sustainability issues. Everywhere it works, the
Company plays an active role in the local communities, mainly offering employment opportunities, personnel training, etc.; by
working effectively with local suppliers and subcontractors, creating economic and social value, and finally by contributing
to infrastructures construction (e.g. access roads, construction camps with
all the facilities such as hospitals, power generation, etc.).
Saipem’s international workforce and breath of internationalism is another facet of sustainability: all personnel is
treated with dignity, always respecting their cultural values, local customs and
traditions, their diversity and identity.The decentralised Saipem structure,
with the strong empowerment of local operations and management, ensures
that the ‘voice of the customer’ is heard throughout the organisation,
and that the overall project strategy is aligned with the local project needs.
For each project, social, economic and environmental effects are continuously
monitored, as well as the satisfaction of customer’s requirements.
SAIPEM SUSTAINABILITY TALENT
Saipem has defined a framework for its Corporate
Responsibility towards sustainability based on
principles defined in the Code of Ethics and the
Sustainability Policy.In 2008, Saipem SpA has defined and issued a new
Organisation, Management and Control Model, which
includes the new Saipem Code of Ethics which has
replaced the one formerly in force.
The new Code includes general principles for
sustainability and corporate
responsibility, defines behaviour rules and relations
with Stakeholders, and identifies the tools and the
internal structure for the implementation of the new
Code.In conducting its activities,
Saipem stands up for the protection and promotion of human rights inalienable and fundamental prerogatives of human beings and basis for
the establishment of societies founded on principles of
equality and solidarity. Besides, in 2008 a new
Corporate Sustainability
Policy has been approved by the Saipem’s CEO. The Policy,
in line with the principles defined in the Code of
Ethics, brings together the Group’s common framework
of values and provides the foundation of the Saipem
Sustainability culture. It expresses the Group’s
vision on sustainability and incorporates this concept into
the company’s day-to-day operations as well as its long-
term planning. Therefore, it is a practical guide for the
way that the Group and its employees conduct business.
Sustainability Principles
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coordinating the sustainability activities of all relevant functions and operating units around the world.The Team focuses on reporting, planning, in cooperation with reference people in Corporate functions, assessing social impacts, performing stakeholder engagement, identifying opportunities and providing advice on global scenarios and trends and on local sustainability initiatives as well.
In the relevant geographical areas, a Sustainability Facilitator is responsible for the coordination of sustainability initiatives at local level. The Facilitator promotes and develops initiatives for the increase and improvement of local content, for the good relationship with the local stakeholders and the sustainability accounting.
SUSTAINABILITY ORGANISATIONIn 2007 the Sustainability Committee was created, joining together all Corporate Vice Presidents (representing Human Resources, QHSE, Procurement, Assets, Corporate Affairs and Administration Finance and Control, Legal Affairs, Risk & Opportunities Knowledge Management), the Chief Operating Officer and the Chief Executive Officer of Saipem sa, thus representing the entire top management. It now includes also BUs Directors. The Committee provides strategic guidance on aligning business strategy with a sustainable approach.
Besides, a Sustainability Team has been established, at Corporate level, directly supporting the Committee and
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Nigeria is situated in the West African region and has a
land mass of 923,768 sq km. With more than 130 million people, Nigeria is the most populous country in Africa, and it comprises about 374
pure ethnic groups, three of them, Hausa, Ibo and Yoruba
are the major groups and constitute over 40 per cent of
the population.Nigeria, in addition to its
huge population, is endowed with significant agricultural, mineral, marine and forest resources. Petroleum and natural gas are the source
of most of Nigeria’s export earnings. Their extraction
is concentrated in large amounts in the Niger Delta
and just offshore. Smaller deposits are scattered
elsewhere in the coastal region.
COUNTRY OVERVIEW
NIGERIA
Social indicatorsPopulation growth rate (1) (2008 est.) 2.38%
Religions (1) Muslim 50%, Christian 40%, indigenous beliefs 10%
Languages (2) English. There are 3 main indigenous languages spoken by the 3 predominant ethnic groups in Nigeria. These are Yorubas in the
West, Hausa-Fulani in the North and the Igbos in the East.
Labour force participation (2006) Female 45.5%adult population (3) Male 85.2%
(1) CIA World Fact Book 2008. (2) OECD 2008 - African Economic Outlook.(3) World Statistics Pocketbook/United Nations Statistics Division.
ECONOMIC AND ENERGY OVERVIEW
The National Economic Empowerment and Development Strategy (NEEDS) is the guiding framework for economic
reforms aiming at accelerating economic growth, reducing poverty, and achieving
the Millennium Development Goals (MDGs).
NEEDS is generating efforts to address structural and institutional weaknesses
of the economy, tackle corruption and overhaul public expenditure
management.
6% 3%
18%
27%
46%
Age structure (projected for 2005)Source: Nigerian National Bureau of Statistics ‘Social Statistics in Nigeria’, 2005
50-64 years
15-29 years
Over 65 years
30-49 years0-14 years
SOCIAL OVERVIEW
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Economic indicatorsGross Domestic Product (GDP) (current prices 2006) (1) ($ billion) 146.889
GDP real growth rate (2006) (2) (%) 5.6
GDP per capita (2006) (1) ($) 1,049
Inflation rate (consumer prices) (3) (2008 est.) (%) 6.5
Industrial production growth rate (3) (2007 est.) (%) 3.1
Labour force (3) (2007 est.) (million) 50.13
Labour force by sector (3) (1999 est.) agriculture: (%) 70
industry: (%) 10
services: (%) 20
Source: (1) International Monetary Fund, World Economic Outlook Database, October 2008.(2) OECD 2008 - African Economic Outlook.(3) CIA World Fact Book 2008.
Energy supply and consumption (IEA 2006) Production Import Export
Coal and Peat 5 - -
Crude oil 127,156 - (121,248)
Petroleum Products - 7,968 (1,513)
Gas 23,892 - (14,894)
Nuclear - - -
Hydro 663 - -
Geothermal, Solar, etc. - - -
Combustible Renewables and Waste 83,624 - -
Electricity - - -
Heat - - -
Total* 235,340 7,968 (137,655)
* Totals may not add up due to rounding. In thousand tonnes of oil equivalent (ktoe) on a net calorific value basis.
ENVIRONMENTAL ASPECTS
The National Economic Empowerment and Development Strategy (NEEDS) in 2004 highlighted the following environmental issues:• Environmental degradation, including
desertification, flood, erosion, and deforestation;
• Waste management;• Sanitation, especially in towns;• Oil and gas pollution control;• Enforcement of environmental laws;
• Loss of biodiversity;• Environmental data management.Desertification is considered one of the major problems in Nigeria, made worse by massive water impoundment and irrigation schemes. Other environmental threats include brushfires, increasing demand for fuel wood and timber, poaching within protected areas, road expansion, and oil extraction activities.Besides, the petroleum and natural gas industries – with their oil spills, burn off of natural gas, and clearance of
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Environmental indicatorsLand use (2005) (1) (%) Arable land: 33.02 Permanent crops: 3.14 Other: 63.84
Electricity Consumption (2) (TWh) 16.85
CO2 emissions (3) (Mt CO2 eq) 51.42
Freshwater withdrawal (2000) (1) (cu km/y) 8.01
Freshwater withdrawal per sector (1) (%) Domestic: 21 Industrial: 10 Agricultural: 69
Terrestrial and marine areas protected (2005) (4) (sq km) 57,102 (6.1% of total territorial area)
Source: (1) CIA World Fact Book 2008.(2) (IEA 2006). Gross production + imports - exports - transmission/distribution losses.(3) (IEA 2006). CO2 emissions from fuel combustion only. Emissions are calculated using IEA’s energy balances and the Revised 1996 IPCC Guidelines.(4) United Nations Statistics Division.
vegetation – have seriously damaged the land, vegetation, and waterways in the
Niger Delta.The Federal Environmental Protection
Agency (FEPA) was established in 1988 to control the Nigerian
environment, its resources exploitation and management. In 1999, the new Ministry of Environment was created to demonstrate the administration’s
commitment to issues concerning environmental protection and
sustainable development. The Ministry brought together all the federal
government’s agencies and departments whose activities related to environment,
including FEPA.Many action plans have been developed
to establish national programs. A number of international environmental
conventions have been signed and/or ratified. The ministry has become more
coordinated in addressing environmental concerns and requiring and carrying out environmental risk assessments prior to
project initiation.Besides, the Ministry of Environment
developed the Environmental Renewal and Development Initiative (ERDI),
with the scope of inventorying natural resources, assessing the
level of environmental damage and implementing restoration and additional measures to halt further degradation of
the environment.
12.0% 1.3%
14.9%
2.7%
37.3%
31.7%
GDP by Sector (2006)Source: OECD 2008
Wholesales, Retailtrade, Restaurants& Hotels
Oil
Other services
Industry(excluding oil)
Agriculture
Building& construction
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In Nigeria, Saipem’s history and heritage in promoting Nigerian Content within the Group activities materialised by means of the constitution and the due incorporation of two Nigerian subsidiary companies.Saipem Nigeria Ltd (SNL) was the first Saipem Nigerian Subsidiary, operating in the country since the mid 60s as an Onshore and Offshore Drilling Contractor.Saipem Contracting Nigeria Ltd (SCNL) is nowadays the main operating Saipem Nigerian Subsidiary Company. Incorporated in Nigeria in 1989, SCNL operates principally as Engineering, Procurement, and Construction (EPC) contractor for the execution of turn-key projects including oil, gas and water pipelines, oil, gas, and industrial plants, infrastructure, fabrication of offshore structures and maintenance services.
In 1998, as a further step of Saipem’s continuous commitment to the future of its presence and operations in Nigeria, Saipem invested in substantial infrastructure necessary to equip Saipem Contracting Nigeria Ltd and Saipem Nigeria Ltd, with a consolidated hub for their project related operations for the oil and gas sector in Nigeria: the Rumuolumeni Base.The Base is located at Rumuolumeni (a community about 10 km from the
town of Port Harcourt). The complex covers an area of more than 700,000 square metres, including the Offices Area (main offices, the engineering building, the clients project office, the Clinic, the recreational facilities, the mess hall, the HSE Training centre, the stores, the maintenance area, etc.) and the Offshore Fabrication Yard with turner, mechanical, heavy equipment, steel carpentry, caravan repairs, blasting, painting, welding and motor vehicle workshops, jetty, electric power plant, and helipad.
Saipem offshore drilling operations are carried out by Scarabeo 3 and Scarabeo 7.
SAIPEM PRESENCE IN NIGERIA
Saipem Nigeria Ltd Offshore Drilling
Onshore Construction
Offshore Construction
Design Engineering
Maintenance, Modificationand Operation (MMO)
Saipem Contracting Nigeria Ltd
The Rumuolumeni Base
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MAIN PROJECTS
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Main projects conducted in the last 5 years
Name Client Description
Gbaran PPL/FLB Shell Petroleum Two onshore construction projects located in Bayelsa projects Development Co State. The projects’ scope covers the construction of a 300 of Nigeria Ltd km of pipeline and a field logistic base.
OB-OB Gas NAOC An onshore construction project located in Obiafu/Obrikom.plant project Nigerian Agip Oil Co Main project scope is to increase the gas supply to N-LNG Bonny
upgrading the existing Obiafu/Obrikom gas plant.
Nembe Cawthorn Shell Petroleum A construction project for a 30" x 46 km pipeline, No. 6Channel Truck Development Co minor feeder lines of different size, No. 2 new manifolds of Nigeria Ltd line project with 24"/30" traps, No. 6 platforms with 30" Block
Valves, decommissioning and mothballing of existing 28" pipeline.
Okoloma Gas plant SPDC An onshore construction project located in Afam. Main project objective is the increase of the gas supply and the
upgrading of the existing Afam 1V gas plant.
AKPO project Total Upstream Engineering, procurement, construction, installation and Nigeria Ltd commissioning of subsea pipelines, umbilicals and risers, and the
construction of an oil offloading system, the installation of an FPSO mooring system and the laying of a gas pipeline between the FPSO and the Amenam AMP2 platform.
East Area Project ExxonMobil An offshore construction project located at Rumuolumeni Base. For the fabrication of 3 jackets, Riser and Riser protector, Boat landings, Arches, including 2 well head platform extension assemblies and miscellaneous steel and pipe spool to support the offshore retrofit and revamp work (4,750 t).
MMO Various Maintenance, Modification and Operation. Main activities include piping, structure and anti-corrosion services.
Scarabeo 3 Addax Petroleum Offshore drilling activities.
Scarabeo 7 ExxonMobil Offshore drilling activities in the Erha field.
Main past projects
Erha ExxonMobil EPIC-type project involving the engineering, procurement, construction, transport and commissioning of an FPSO installation on the Erha field in Nigeria.
Amenam 2 Elf Petroleum Installation of the jacket of the Amenam 2 platform; Nigeria Ltd fabrication and installation of the deck completed utilising the
float over method; fabrication of the interconnecting bridge between the new platform and an existing platform, utilising the derrick pipelay vessel Saipem 3000.
New projects
OML58 TEPNG An onshore construction project located at Ogbogu Total E&P Nigeria Ltd and Obite. The main project objective is the revamping and
increasing of the capacity of a flow station, treatment and production centres in order to increase Client’s marketable gas.
Usan UFR & OLT TEPNG An EPIC offshore project carried out at Rumuolumeni Total E&P Nigeria Ltd base. For subsea: umbilical, flowlines, risers connecting 42 well
heads, oil loading lines as well as FPSO anchoring.
Ebocha NAOC An onshore construction project located at Ebocha Oil Centre. Nigeria Agip Oil Co
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COMPANY ORGANISATION AND MANAGEMENT SYSTEMSaipem activities in Nigeria are under the responsibility of the Managing Director, who is supported by a number of staff Departments to develop the operations for offshore, onshore and maintenance.
Since 2005 Saipem Contracting Nigeria Ltd has a Quality Assurance management system certified according to ISO 9001; while in 2008 the company has reached the important goal with the certification of the environmental management system according to the ISO 14001 standard and the ‘occupational health and safety’ management system according to the OHSAS 18001 standard.
The sustainability approach is the results of the competent management displayed by all Company’s Departments. In particular, the QHSE Dept. is mainly involved in all sustainability issues related with employees’ health and safety, and the protection of the environment, while the Logistics, security coordination and ICT Dept. is mainly involved in all issues related with human resources management and industrial relations, but also with relation with local communities. The Procurement and Logistics Department mainly deals with Clients and Public Authorities, coordinating the implementation of the ‘Nigeria Content Development Plan’.In 2009, Saipem is going to reorganise the Local Content Department with the aim to coordinate the activities managed in term of sustainability both at project level and at staff level.
Saipem Contracting Nigeria Ltd Saipem Nigeria Ltd
M A N A G I N G
D I R E C T O R
ASSETS
LEGAL
ONSHORE COMMERCIAL& OPERATION
BUSINESSDEVELOPMENT
OFFSHORE
ADMINISTRATION, FINANCE
AND CONTROL
LOGISTICS,SECURITY AND COORDINATION
& ICT
PROCUREMENT
AND LOGISTICS
QHSE
OFFSHORE
OPERATIONS
ONSHORE
OPERATIONS
MAINTENANCEMODIFICATION
AND OPERATIONS
PROJECT CONTROL
M A N A G I N G
D I R E C T O R
DRILLING
OPERATIONS
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THE APPROACH TO SUSTAINABILITY
Saipem has been conducting its operations in Nigeria for over 30 years. Saipem strategy has always been based
on the ‘willingness to stay’, with a strong commitment to create an adding
value to the Nigerian economy and society.
Saipem activities consistently interact with both the physical and social
environment. In responding to the environmental challenges in the Niger
Delta where it operates as an EPIC contractor in the areas of Engineering,
Procurement, Installation and Construction for Oil and Gas companies, Saipem has adopted a holistic approach.
In line with the Saipem corporate strategies, Saipem Nigeria strategy
focuses on improving the quality of the physical environment while adding value to human capital – an approach that has resulted in several initiatives that aim to
ensure sustainable physical and social development.
Saipem is working on the promotion and development of local content with the creation of long term investments, the creation of partnership with local companies, and the maximization of
projects’ value executed in country, of local employment, and of procurement
executed in country.Saipem core values are employees’
skills development and professional growth, their health and safety and the
protection of local environment.Besides, the engagement with local
communities and the support of local socio-economic development are a must
for Saipem in Nigeria.Saipem executes projects within the
broader framework of company policies, national statutes, international laws
and conventions applicable to the environmental protection in Nigeria.
Local Content
Nigerian Content Development is a major and ingrained concept in Saipem.
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In Nigeria over the past 30 years Saipem has been committed to developing an adding value to the Nigerian economy through its operations in the onshore
and offshore oil and gas business.This has been achieved by the huge
investment made in the Rumuolumeni base, as well as other related project investments to broaden the Saipem
horizon in building and adding value to Nigeria.
Saipem has participated and demonstrated total commitment in
pursuing the Government’s regulation coordinated by the Nigerian National
Petroleum Corp (NNPC) on the Nigerian Content development.
The strategic location of the Saipem Group projects in various Niger Delta host communities avails Saipem the
opportunity to showcase its corporate commitment to sustainable community
development while executing projects in these communities. This commitment
is expressed trough the signing of Memorandum of Understanding (MoU) with the local communities themselves
or with Clusters of Communities.
The Approach for Security
Never before in its 30 years and more in Nigeria, Saipem has had to face as
many security challenges as during the last three years (2006-2008). At a time when competitors were leaving
the country because of a rapidly deteriorating security environment,
which was putting at risk not only their business but also the life of personnel,
Saipem Nigeria management, in line with its motto ‘Here to Stay’, decided to further develop its existing security
strategy and to continue its work in the area of the Niger Delta.
To be successful, this security strategy had to reflect all those values that had
contributed throughout the years to the success of the company; in a few
words Saipem Nigeria had to develop a ‘Sustainable Holistic Security Strategy’.
Bearing in mind the paramount objectives of protecting people’s life,
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Today, in every project in the Niger Delta local communities are also ‘security’ stakeholders and the company is using this approach to expand its local content policies even more; creating a secure environment for Company’s projects to proceed unimpeded is a goal shared by those communities impacted and benefiting from the presence of Saipem Nigeria projects in their midst.
Nigerian Content
Development in Saipem
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PEOPLE
Total Workforce
The total number of Saipem Contracting Nigeria Ltd (SCNL) employees at the
end of 2008 is 3,139. The number of local employees is 2,786, representing 89% of the total workforce. By always applying a local content policy, Saipem has progressively increased the number
of local employees.In the future, Saipem aims at increasing
the percentage of local employees mainly in the high and managerial positions by implementing a local
employees’ development plan and training programs.
The total number of Saipem Nigeria Ltd (SNL) employees is 143 at the end of
2008. Local employees are almost 80% (114); split as follow: 3 managers, 20
senior staffs and 91 junior staffs.
People management
In 2008 Saipem Nigeria carried out a climate and motivation study within its local population. The 22% of the
local senior staff of the company were involved. The essence of motivation and
climate survey was to determine the
SUSTAINABILITY PERFORMANCE
500
1,000
1,500
2,000
2,500
3,000
3,500
Increase of SCNL local staff over total workforce
2004 2005 2006 2007 2008
2,741
3,268
2,452
3,186 3,139
21%
18%
18%
14% 11%
79%
82%
82%
86% 89%
LocalInternational
10
20
30
40
50
60
70
Development of local personnel to Middle Management (IMS) positions for SCNL (No. of Local Middle Managers)
2004 2005 2006 2007 2008
6
12
43
65 63
20
Pipe fitters’ training school
in Rumuolumeni Base
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level of satisfaction of the employees professionally and personally within Saipem. It measured what employees think of the functions they perform, the role they play and how they relate with people as they work within the Company.Two sets of questionnaires were used:• Individual questionnaire requiring a
follow up interview. Areas of survey: experience in Saipem, organisational culture, job satisfaction, HR planning, training and development plan. This questionnaire provided qualitative information.
• Company specific questionnaire (anonymous), with questions concerning the Role/Job, Department perception, Company’s perception. This questionnaire provided quantitative information and was based on numerical scores.
While the sampled population also felt comfortable with the company’s culture and their job functions, they required rapid improvement in areas such as HR planning; development of careers for succession and reduction of foreign staff in Nigeria.Results from the analysis supported Saipem in the definition of the Human Resources 2009 program. Main points of improvement will be the compensation system and the Career development path in the company.
Training
Saipem construction and drilling activities requires the highest professional and safety standards. This can be achieved only through comprehensive training programs to increase employees’ competence in job execution, including both training activities in class but also training-on-the-job, which is often difficult to quantify.Training activities are mainly addressed to local workers to prepare specialised workers (pipe fitters and welders), or to train young graduates. In this category, significant is the participation in API specification Q1 training at Houston,
Radiation safety and Fibre optics design and development techniques. Several technical training programs were also conducted to boost core project staff capacity with an amount of about 4,543 worked man hours.Forty young graduates were trained in various engineering disciplines shortly after their recruitment in Saipem. All engineering courses were evaluated upon conclusion and all successful trainees were posted to continue on-the-job learning as junior engineers in the company.In addition to the technical training, Saipem focused on managerial training as Project Management, Risk Management, Problem Solving, Multicultural Team Building, etc.
Besides the internal training, Saipem is promoting training activities for non Saipem employees, mainly addressed to give locals qualified skills and to support the introduction of young graduates in industry through internship programs coordinated with local Universities.In 2008, 38 students from various technical institutions carried out their industrial training programs in Saipem for periods ranging from 3 months to 1 year. The program (SIWES Students Industrial Works Scheme) of the Federal Government enabled the students to acquire technical experience before graduation from school.Besides, a technical training program on craft skills in Welding and Pipefitting
20
40
60
80
100
120
140
Total training hours per year (thousand hours)
2004 2005 2006 2007 2008
81.214
67.361
105.498
125.026
98.058
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works was conducted for 39 young people of Akwa Ibom State. This
program was conducted in the SCNL Training Schools in the Rumuolumeni
Base. Furthermore, in line with the new NNPC guideline on human capital
development, Saipem is training 24 young engineers on subsea engineering
and deepwater installation methodology as well as 29 youths from the Niger Delta States on pipe welding skills.
Safety
Being aware that the construction industry which includes Saipem
Contracting Nigeria Ltd is among the industries with the highest risk of fatal
injuries, SCNL has implemented a management system which, in 2008,
has been certified according to the OHSAS 18001:1999, the international standard for the safety management.
Issued by TUV India (third party accreditation body), the certificate let
employees and other stakeholders know that SCNL proactively protects the health
and safety of its workforce.The SCNL successful management
system, that had lead to OHSAS 18001 certification, is based on:
4
8
12
16
Safety Trailing indicators for SCNL
(mill
ion
man
ho
urs
)
2004 2005 2006 2007 2008
7.85
4.00
0.700.61 0.36
0.560.25
0.120.10 0.09
2
4
6
8
0.3
0.6
0.9
1.2
Safety Trailing indicators for Drilling operations(Scarabeo 3 and Scarabeo 7)
(mill
ion
man
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2004 2005 2006 2007 2008
4.72
3.87
2.51
4.02
1.26
2.83
0.00 0.00 0.00 0.00
LTI Frequency RateWorked manhours TRI Frequency Rate
2
4
6
8
Leading indicators for SCNL 2004 2005 2006 2007 2008
Safety Hazard Observation Cards 2,878 3,822 4,294 9,965 12,441
Tool Box Talks 6,186 8,521 6,912 14,894 21,809
HSE Meetings 589 766 511 678 1,164
Job Safety Analysis 799 4,435 1,892 8,125 10,634
HSE Training Hours 8,940 19,591 26,237 44,589 51,546
HSE Inspections 840 1,527 2,892 6,186 10,314
Leading indicators for Drilling Operations with Scarabeo 3 and Scarabeo 7 2004 2005 2006 2007 2008
Safety Hazard Observation Cards 5,207 6,894 8,444 9,478 12,255
Tool Box Talks 1,381 2,143 2,370 1,928 2,122
HSE Meetings 322 776 733 621 575
Job Safety Analysis 7,339 9,795 9,200 11,010 10,049
HSE Training Hours 3,366 2,484 5,200 1,518 1,376
HSE Inspections 100 132 167 184 182
HSE Management Visits 81 147 72 94 61
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• An occupational health and safety policy appropriate for the company.
• Identification of occupational health and safety risks and legal and other requirements.
• Objectives, targets, and programmes that ensure continual improvements.
• Management activities that control the occupational health and safety risks.
• Operational controls.• Monitoring of the occupational
health and safety system performance.
• Continual reviews, evaluation, and improvement of the system.
As a result of the OHSAS 18001 certification, the following key initiatives are now in place, making SCNL HSE Management System more robust:• Audiometric test as part of routine
pre-employment checks.• Spirometric test for personnel
exposed to chemicals.• Monthly supervisors assessment.• Monthly IVMS monitoring and
analysis.• Publications of HSE quarterly
newsletter.• Publication of HSE induction
handbook.
• Publication of HSE Toolbox Talk Handbook.
• Bi-annual auditing of all project sites.• Documentation of all SCNL
associated risk in a risk register.• Documentation of all SCNL related
legal and other requirements in a legal register.
• Periodic auditing of legal compliance.
Main benefits deriving from the Management System implementation and the OHSAS 18001 certification are:• A clear indication to Saipem clients
and all stakeholders that the Company is a socially responsible organisation.
• A system for continually identifying legal and other requirements.
• A clear management structure delegating authority and responsibility.
• A clear set of objectives for improvement, with measurable results.
• A structured approach to risk assessment within the organisation.
• A planned and documented approach to health and safety.
• A clear process for monitoring of health and safety management issues, auditing of performance and review of policies and objectives.
Saipem operations for pipe laying in
Nigeria
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HSE performance during 2008 indicates that SCNL Trailing Indicators
surpassed the targets established by the management and by Saipem Corporate
for the entire Saipem Group. Statistically, the Company recorded 1 Lost Time
Injury (LTI) and 3 Total Recordable Incidents (TRI) in 10,982,093 manhours
of work in 2008. This translated to an LTI Frequency Rate (LTIFR) of 0.09 and a
TRI Frequency Rate (TRIFR) of 0.36 which surpassed Company and Corporate
targets that was fixed in 2008.Also Leading Indicator Performance resulted in an improvement in 2008
compared to the past years.The status on key HSE Management
System elements highlights the activities and challenges in key areas
including Policy and strategic objectives, regulatory compliance, risk assessment
and risk management, accidents/incidents/near misses/unsafe acts
and unsafe conditions management, audits, HSE personnel competence
development, OHSAS 18001 certification.
The status of Key Resolutions for the 2008 HSE Improvement Plan highlights
that the SCNL HSE Management System was suitable and adequate in line with
its committed Policy.
In Nigeria Saipem is also performing offshore drilling operations with the
Scarabeo 7 and Scarabeo 3. The safety performance of the two vessels is very good with a LTIFR of 0 since 2005 for
the Scarabeo 3 and since 2004 with the Scarabeo 7. That is the reason why the two Saipem vessels received several
awards for their safety performance. Scarabeo 3 and Scarabeo 7 are excellent
also in term of proactive indicators (see table on page 22).
HSE trainingSaipem is continuously conducting
safety training for its entire staff, both existing and newly-hired employees.
A dedicated training centre with professional trainers has been set up
to guarantee that safety awareness training is delivered on a daily basis to all
employees.Saipem Nigeria started in January
2008 with Leadership in Safety (LiS) workshops. It was a demonstration of
Saipem Nigeria commitment to ensure a company wide awareness of the Saipem
new safety vision represented in LiS program. To this effect, Saipem Nigeria
have aligned a total of 152 personnel into the LiS programme. This number
comprises both top management cadre personnel of Saipem Nigeria as well as middle management cadre personnel from all projects within onshore and
offshore Business Units, in addition to Rumuolumeni Base’s and Lagos Office’s
workers, including QHSE personnel.
Health
Saipem policy guarantees medical assistance internally managed in all sites
and projects worldwide.The Rumuolumeni Base has a clinic and a team of 8 medical personnel, comprising
both doctors and nurses. They provide medical assistance to employees and
subcontractors working in the Base and on nearby operational sites.
Besides, on each project in Nigeria, a medical team comprising of at least
one medical doctor and nurse provides support to all employees. The total
number of people working in the medical department is 39 (of which 28 are local).
The medical team, in addition to provide curative medical assistance,
implements preventive activities such as periodical employees’ examinations and
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60
Total HSE Training Hours (thousand hours)
2004 2005 2006 2007 2008
12.306
22.075
31.437
46.107
52.922
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immunizations, health risk assessment and education programs focused on malaria awareness and sexually transmitted diseases (STD).As of 2007, Saipem Nigeria Health Department implemented hearing monitoring program aiming to monitor the effectiveness of the personnel working in areas where noise is above 85 dB. After the survey and the identification process for 2008 were completed, 75 employees were identified to be exposed to elevated noise levels and were essentially enrolled in the program and were subjected to base line audiometric examination (for newly employed) and annual audiometric examination (for those who were already identified in year 2007).Starting from 2008, audiometric examination was included in Saipem Nigeria protocol for pre-employment and periodical medical fitness examination and became one of the parameters that are continuously monitored on bi-annual basis.In order to ensure high level of emergency response and preparedness
Saipem Nigeria Health Department organised and carried out 52 First Aid training courses involving 351 Nigerian employees. In addition, Saipem Nigeria organised and provided specialised training to 11 Nigerian medical personnel i.e. 8 medical personnel were trained in BLS (Basic Life Support) and 3 in ACLS (Advanced Cardiac Life Support). Specific trainings for medical personnel took place in advanced resuscitation academy and were sponsored by Saipem Nigeria.In 2008 the Health Department enhanced its focus on health prevention, health protection and health promotion. Saipem organised and conducted training sessions on health topics (sexual transmitted diseases, occupational health awareness, health effects of malaria, cardiovascular prevention, hygiene awareness for catering personnel) aiming to increase the health awareness and health knowledge of the 5,352 attendees.In 2008 it was also implemented a system of early reporting of occupational diseases. Reports have been sent to
Clinic in Rumuolumeni
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Saipem Corporate on weekly basis. During 2008, there have been no
occurrences on any of the project sites within Nigeria where health is managed
by Saipem.
Industrial relations
All Saipem employees in Nigeria are represented by the National Union of
Civil Engineering Construction Furniture and Wood Workers (NUCECFWW), Construction and Civil Engineering
Senior Staff Association (CCESSA) and (CCESSA) Pipe-Welders & Pipe-Fitters
as the main trade unions, representing junior, senior staff, special workers (pipe
fitters and welders) respectively.Local employees agreed to specific
contractual conditions according to the Memorandum of Procedural Agreement,
signed by Saipem and by local trade unions. These contracts are linked to the different employment categories existing
within the company: junior staff, senior staff and special workers (pipe fitters
and welders). These agreements define the basic salary, detailed conditions,
benefits and allowances paid by Saipem
and are renewed every two years following negotiations between the
two parts. The last agreement has been signed in 2009.
Trade unions support Saipem in maintaining positive and strict
relationship with workers.
ENVIRONMENT
Saipem Contracting Nigeria Ltd has in place an Environmental Management
System which has been certified by TUV NORD in 2008 according to ISO 14001:2004 international standard.ISO 14001 certification achievement
has been a huge commitment by SCNL to involve and give responsibility to all
members and functions of the company. The environmental performance has become an important part of SCNL
corporate culture.New procedures has been established
in 2008 to comply with the ISO 14001 requirements such as the environmental
management plans; waste management procedures; pollution
control procedures; spill contingency
Working in a challenging environment
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procedures; performance monitoring and reporting procedure; hazard-aspect analysis and risk assessment; documentation of regulatory register.
SCNL has also implemented:• weekly compliance monitoring of
sewage treatment plant/vehicle wash area effluents;
• monthly monitoring of air emissions/gases, noise level and surface water in and around operational facilities;
• biannual monitoring of groundwater;• regularly conducted spill drills in
preparation for emergencies;• series of environmental management
awareness training;• regular auditing to assure
conformity, determine effectiveness of environmental system, and encourage continual improvement.
Benefits of ISO 14001 certification:• It has provided an assurance that
SCNL meets, and will continue to meet, environmental management system commitments and corporate policy requirements.
• SCNL has shown to business partners, regulatory agencies, and host communities that SCNL is an environmentally responsible company.
• SCNL now has a verifiable system for recognizing and complying with environmental laws and regulations.
• Better communication approach about environmental issues inside and outside the organisation.
• It has brought an increased in SCNL competitiveness and market share.
• SCNL has increased profits through process improvements and energy conservation.
• SCNL achieved a reduced environmental liability.
• SCNL has achieved a reduction in use of hazardous materials and generation of hazardous wastes.
• Expedited or streamlined permitting processes.
• Increased focus on the environmental management systems put in place has ensured a continuous improvement.
• SCNL now has established an integrated approach to environmental management.
Waste
There is an increasing international and national concern for wastes to be properly managed in order to minimize their potential to cause harm to health or the environment. Moreover, efficient management of wastes can reduce operating costs and potential liabilities. Saipem Nigeria engages accredited waste disposal contractors to dispose the waste at approved dumpsites as per the stipulations laid down by the Government Environmental Authorities. All the wastes generated from various activities are appropriately defined and documented. The Nigeria Federal Ministry of Environment commended Saipem Nigeria five consecutive years for good house keeping and environmental practices.
Although the improvement of the environmental system, in 2008 the amount of waste registered a considerable increase. The contributing factor in hazardous waste was oily water. 156 tonnes of oily water was disposed of in the year 2008, which was zero in the year 2007.Regarding non-hazardous waste, the increase was due to a large amount of metal scrap, which was produced
1
2
3
4
Waste (thousand tonnes)
2004 2005 2006 2007 2008
Hazardous Non-hazardous Total
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during construction activities in the new investment area and the removal of old items near the helipad area which were
lying for a long time. During the shifting
of items placed near helipad to the new investment area, many items were
disposed as scrap.
Climate Change
According to the requirements defined by Saipem Group, Saipem Nigeria
monitors the consumption of energy, both as fuels consumption and
electricity consumption. The emissions of greenhouse gases are calculated from
the energy consumption numbers.
Environmental Impact Assessment
In order to proceed with the Rumuolumeni Base expansion plans,
Environmental Impact Assessment (EIA) studies were carried out at the time of
Base Expansion I & II, in compliance with
28
30
60
90
120
Greenhouse Gases (thousand tonnes CO2 eq)
2004 2005 2006 2007 2008
Saipem offshore drilling operations in Nigeria
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the Federal Ministry of Environment guidelines which included:• scope of the proposed projects;• relevant legal and administrative
requirements of the project;• need and justification for the projects;• description of projects;• baseline environmental profile of the
project area and its environs;• determining the framework for
interaction and integration of views of a multidisciplinary project team with regulators, host community and stakeholders;
• defining the procedures and protocols for identification and assessment of potential and associated impacts and selecting appropriate limitative and ameliorative measures for adverse impacts;
• developing an effective environmental management plan to be implemented during and after the construction phase.
New Sewage Treatment Plant
Saipem Contracting Nigeria Ltd engaged an external subcontractor for the construction of a sewage treatment plant in the Rumuolumeni Base with a designed capacity of 120 m3/day.Main benefits of the new sewage treatment plant are:• Guarantee the effluent meets the
limits as set up by the Nigerian Regulatory authorities.
• Possibility of reuse of water for gardening, dust separation, cleaning of vehicles, etc. to encourage water conservation and also prevent contamination of water bodies.
Painting and blasting operations in an environmental friendly manner
Saipem Contracting Nigeria Ltd has installed new semi automatic equipments for Blasting and Painting operations. This blasting and painting process undergo several stages such as
independent rolling of pipes, automatic collection of pipes by pipe collector, closed blasting operations, internal pipe collection system and spray painting.This user-friendly technology eliminates many hazards that can affect both the immediate users, others personnel working around the workshop and the entire environment.
CUSTOMERS
Saipem is working in Nigeria for several customers in the oil and gas industry, such as Eni, Total, Shell, etc. Oil companies are operating and producing in Nigeria through locally registered branches, which sign joint venture agreements with the Nigerian National Petroleum Corp (NNPC).The relationship between Saipem and its customers is very close, being able to discuss directly with them about specific issues, concerning also local content, HSE or security issues.As Saipem, also oil and gas companies need to comply with the ‘Nigerian Content Development Plan’, requiring that at least 80% of the overall value of projects shall be based in Nigeria.Saipem efforts to improve the local content for its activities are seen as an advantage for clients with regards to the local authorities’ requirements.A peculiar model has been implemented by Saipem in order to quantify the Nigerian Content of main projects. The model considers the costs related to projects that should be considered as local costs. Targets for Nigerian content of each project are shared with the client and monitored on quarterly basis.During new project acquisition, Saipem collaborates with the customer also in the definition of the local content plan and of the commitments towards local communities through the signature of MoUs.
SUBCONTRACTORS & SUPPLIERS
According to the ‘Nigerian Content Development Plan’, Saipem is committed
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to increase the local suppliers and subcontractors. Yearly, Saipem organises
initiatives to meet key local suppliers and subcontractors and to include them into the Saipem Vendor Database. After obtaining necessary documents, Saipem Nigeria inspects subcontractor’s offices/
facilities before awarding the contract to determine the extent of conformity of
subcontractors to meet its requirements and standards.
Concerning local expenditures, Saipem is improving its accounting system
related to the project cost control. Since 2004, local costs of the most important
projects are planned and quarterly monitored in a formal sheet.
The Local Content model, which will be formalised in 2009, will be used to
monitor the overall Saipem local content data. When available, these data will be compared with the same data of
the competitors, operating companies and also with data of the Nigerian
contracting companies.An analysis of the past data reveals
that projects’ local content costs increased during the project life. As
example, considering Erha, Amenam 2 and EPC 2A projects, an analysis has been conducted on the percentage of
local content costs (over 50%) and the growing trend during the project life.
Erha project had a very high local content percentage since the beginning
of the project and that is why the trend remained almost stable during the
project.
Main voices in the local costs are the construction costs, the procurement costs and the general costs. Others
are the mobilisation/demobilisation, project management worked man
hours, design/engineering, equipment, transportation, QHSE costs, training and
labour.
LOCAL COMMUNITIES
A successful relationship with local communities is considered by Saipem
a pre-requisite for the success of each project. Therefore Saipem has
implemented an approach based on a direct contact with the communities,
coordinated internally with a structure managed by a Saipem local lawyer.
Communities’ relations are mainly based on a ‘Memorandum of Understanding’
(MoU), an agreement signed by Saipem and the local communities before the
beginning of each project. This usually sets the percentage of local employment
and purchasing and defines Saipem’s commitments in the development of the community. In some cases,
the MoU is signed directly between the Client and the local community,
and includes also subcontractors’ commitments. In 2008, 10 MoU signed
by the Client are in place, including also Saipem’s commitments. Besides,
Saipem has signed 2 MoU directly with local communities. One of these
MoU concerns the three Rumuolumeni communities where the Operational
Base is placed.
After the signature of the MoU, periodic meetings are held with the local
communities’ representatives, to consult them and present the commitments’
fulfilment.
According to the commitments set up in the MoU with the Rumuolumeni
communities, Saipem participates in the socio-economic development of the
area through a series of initiatives and
50
70
90
Local content trend (Suppliers and Subcontractors)
(% o
f lo
cal c
ost
s o
n t
ota
l)
First year Second year Third year
77.2075.09 76.70
39.74
55.79 57.28
54.61
60.3665.72
Amenam 2Erha EPC 2A
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In 2008, these initiatives mainly focused on:• Employment opportunities;• Education and technical training;• Health;• Infrastructure construction.
In terms of education, Saipem, besides the internship programs and the technical training as described in the ‘Training’ paragraph, supports education through the provision of scholarships, benefiting 20 Rumuolumeni post-secondary students.
In 2008, Saipem provided economic support to the local community for the construction of a water borehole and drainage system and, to boost electricity supply and distribution to the villages, Saipem has donated and installed 500 kVA transformers to the Rumuolumeni community.Besides, Saipem participated in the renovation of the school building and the provision of school furniture. Through the benevolence of Saipem, one of the schools received a living quarters to accommodate its teachers.Saipem carried out the construction and asphalting of the road that links
Mgbuodohia with Nkpor village to enhance communication between the communities. In addition, Saipem took care of the upgrading of roads in Rumuolumeni to improve their quality and usability.
In 2008, the costs supported by Saipem for local communities’ economic and social development amount to about €680,000. The figure above describes main areas of intervention.
56%
1%
43%
Distribution of costs for local projects supported by Saipem in Nigeria in 2008
Education
Infrastructures and social development
Professional Training
31
The Community of Port Harcourt
CO
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Saipem is always looking from past experience to plan future actions and
approaches.Some of the future challenges are
described below, as following steps of the path already in place and described
in this report.
Promoting the image and the capabilities of Saipem in the country by marketing the new organisation
(after the acquisition of Snamprogetti capabilities) and the ability to support
the investors in finding the best solution to their needs.
Playing a role of integrator in the industry acting as main interface with
Government, Customers and local companies, throughout the whole
supply chain. The aim is to move forward from the formal local content concept, by developing and exploiting the potential of local companies which
are the real boost for the Nigerian economic growth.
Local content in term of further development through the acquisition
of projects having dimensions and characteristics which may allow to run
them in the Country.
Further development of sustainability projects and definition of a stakeholder
engagement model.
FUTURE CHALLENGES
GLOSSARY & ACRONYMS
32
EPICEngineering, Procurement, Installation and Construction.
EPCEngineering, Procurement and Construction.
LTILost Time Injury. Any work-related injury, which renders the injured person temporarily unable to perform any regular job or restricted work on any day/shift after the day on which the injury occurred. In this case ‘any day’ includes rest day, weekend day, holiday. The day of the accident is not counted when
calculating lost workdays. Fatalities and permanent total disabilities are included in the calculation of the total the number of the Lost Time Injuries.
LTIFRLost Time Injury Frequency Rate.
LTIFR = No. LTI x 1,000,000
Total worked man hours
NNPCNigerian National Petroleum Corp.
SCNLSaipem Contracting Nigeria Ltd.
SNLSaipem Nigeria Ltd.
TRITotal Recordable Injury. Term to define the sum of Lost Time Injuries (including fatalities and permanent disability cases), work restricted cases and medical treatment cases.
TRIFRTotal Recordable Injury Frequency Rate.
TRIFR = No. TRI x 1,000,000
Total worked man hours
Headquarters: San Donato Milanese (Milan), ItalyVia Martiri di Cefalonia, 67Branches:Cortemaggiore (PC) - Via Enrico Mattei, 20
saipem Società per AzioniCapital stock: €441,410,900 fully paidTax identification number and Milan Companies’ RegisterNo. 00825790157
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