Offshore Energy Development and Special Economic Zones: Opportunities and Challenges
Iroghama Ogbeifun
Managing Director
Starzs Investments Company Limited
Introduction
There is growing demand for Offshore Energy resources and new production technologies.
SEZs and Marine Logistics are strategic to successful Offshore Energy projects.
The relevance of Offshore Energy defines the operational dynamics of Marine Logistics and Special Economic Zones (SEZs).
Enhanced demand for suitable SEZs and practical Marine Logistics operations will present significant challenges in terms of infrastructural development, logistics management, and environmental sustainability.
Benefits of Integrating Offshore Energy to Maritime Logistics and Special Economic Zones (SEZs)
Increase in Supply Chain Efficiency
Improved Infrastructure
Innovation
Economic Development
Environmental Sustainability
Reduced transport costs
Provision of support facilities
Attract investment and job creation
Reduced carbon emissions due to efficient logistics
Enhanced collaboration for Technology development
Examples of Successful Integrated Offshore Energy and SEZ projects
Project leveraged a nearby port facility for efficient transportation. Port selected has an excellent transportation network.
The SEZ status of the location attracted tax incentives and streamlined regulatory processes.
The project was completed under budget with $1bn in savings.
Largest offshore wind farm in the world, with a capacity of 1.2 GW. Leveraged on close by Port of Hull, a green port.
The port of Hull is connected to highways, rail, and inland waterways. Tax incentives and other benefits are available at the selected port.
The location is highly industrialized and has specialist facilities and a skilled
workforce.
The Nigerian Perspective
30 years since the adoption of the Free Trade Zone Model.
Over 20 active zones currently.
About 6 of them directly support Oil and Gas projects such as Onne FZE, LADOL FZE, Snake Island, etc.
New Oil and Gas Free Trade Zones (OGFTZ) in planning and development phases.
Most of the OGFTZ sites are located near a port or along the coastline.
A few Offshore Energy projects have leveraged SEZs in varying degrees (Agbami, Egina, Bonga, etc).
Challenges & Opportunities - SEZs in Nigeria
Challenges
Unclear business strategies, misaligned political support, and ineffective policies.
Insufficient infrastructure.
Weak Environmental, Social, and Governance (ESG) protocols. Inconsistent regulatory and fiscal frameworks.
Poor access to convenient and affordable financing. Inadequate intermodal transportation network.
Slow-paced technology adoption and insufficient skilled labour.
Opportunities
International partnerships (Operational Efficiency, Knowledge
Transfer, etc.)
Diversified collaborations (target manufacturing industries)
Offering a one-stop-shop service (accommodation, warehousing, yard facilities, etc.)
Future of Special Economic Zones in Nigeria
Specialization driven by Innovation
Relevance to Global Value Chain Regional Trade
Digital Transformation - AI, Automation, Environmental Responsibility
Conclusion
Nigeria is strategically positioned to become a Regional Hub for specialized SEZs capable of supporting Africa to realize a sustainable energy mix and give way to the emergence of Nigeria as a global maritime hub.
However, there must be intentional strategy to establish competitve SEZs; Strong Political will to drive coherent policies that encourage friendly business environment; Commitment to Infrastructural development and value creation.
Greater awareness, skill transfer, stakeholder collaborations and alignment will all shape the future of integrated Offshore Energy and SEZs projects.