With over a decade of hands-on experience in some of the world’s most technically demanding oil and gas projects, Mr Philip Aaron is widely regarded as a professional on quality management in the energy sector. As a seasoned consultant and engineer, he has coordinated multinational quality teams, advised on high-stakes Engineering, Procurement, and Construction (EPC) projects, and witnessed firsthand how lapses in quality can escalate into billion-naira losses.
Drawing on work across West Africa, Central Africa, South America, Europe, and Asia, he offers sharp insights into why quality must be baked in – not bolted on. Mr Philip’s expertise lies in simplifying the complexities of the Cost of Quality (CoQ) and demonstrating its critical impact on upstream, midstream, and downstream operations, making his perspectives invaluable to stakeholders seeking to minimise risk and safeguard long-term value.
In this wide-ranging interview, Mr Philip unpacks the often-overlooked cost of quality in EPC projects. From catastrophic oil spills to refinery breakdowns, he illustrates how neglecting quality at the planning and execution stages leads to long-term operational and financial consequences and outlines what industry stakeholders must do to reverse the trend.
Q: Mr Philip, could you start by explaining what exactly the Cost of Quality (CoQ) means in the context of EPC projects?
Philip: Certainly. In simple terms, CoQ refers to the total cost of ensuring quality and the cost of failures when quality is not achieved. It’s broken into four categories: Prevention, Appraisal, Internal Failure, and External Failure costs. Prevention and appraisal are proactive costs for things like training, inspections, and process control. The failure costs are the consequences when things go wrong, like rework, shutdowns, oil spills, or environmental fines. In Nigeria, particularly in oil and gas, the cost of poor quality can be devastating both financially and reputationally.
Q: What are some of the major quality challenges EPC projects in Nigeria currently face?
Philip: They vary across the upstream, midstream, and downstream sectors. In upstream, we see issues like blowouts during drilling due to poor equipment or process failure, like the 2012 Chevron rig incident. In the midstream, it’s often pipeline leaks from poor welding or corroded infrastructure, even vandalism. And downstream? The 2022 adulterated fuel scandal is a prime example of contaminated petrol slipping past quality control, and the country had to recall and re-blend over 170 million litres. The estimated cost was around ₦201 billion. These are all external failure costs stemming from quality lapses.
Q: That’s quite significant. How do these failures affect project performance overall?
Philip: Profoundly. Research shows that Nigerian oil and gas projects average 38% cost overruns and 37% schedule delays. Quality failures are a major contributor. Every faulty weld, every equipment failure, every rework adds to the cost and time. But it goes beyond finances; poor quality also leads to safety incidents and environmental damage, which can result in lawsuits and loss of trust from stakeholders and communities.
Q: How well are quality standards regulated in Nigeria’s oil and gas industry?
Philip: The regulatory framework is actually quite robust. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) enforce quality requirements across project lifecycles. For example, they require approved Quality Management Plans, Factory Acceptance Tests, and third-party inspections. They also mandate service permits for QA/QC providers. However, enforcement and industry compliance are still evolving. The system is only as strong as the implementation.
Q: So where does the industry go from here? What can be done to reduce the cost of poor quality?
Philip: First, invest in prevention, which means solid front-end design, quality training, and vetting suppliers. Second, strengthen quality control during execution through clear inspection plans, the use of qualified personnel, and rigorous documentation. Third, embed quality KPIs in contracts and track them like you would cost or schedule. Also, leveraging technology like automated welding, digital/borescopic inspections, and drones helps catch defects early. And finally, we need continuous learning. Every failure should be analysed for lessons. It’s about building a culture where quality is not an afterthought.
Q: How do contracts encourage the right behaviour?
Philip: Contracts are a powerful lever for driving quality performance if structured correctly. The key is to define quality deliverables up front: data books, certificates, inspection and test plans (ITPs), non-destructive testing (NDT) reports, and manufacturer data record (MDR) indices, all with clear dates, formats, and approval stages. It’s also important to price prevention explicitly. For example, factory acceptance tests cost far less than dealing with failures in the field. Contracts should also include performance clauses such as right-first-time targets, limits on non-conformance reports (NCRs), thresholds for repair rates, and even liquidated damages for recurring or systemic quality lapses. On the flip side, offering gainshare incentives for measurable reductions in rework and schedule risk can drive collaboration and proactive quality management.
Q: And what role do you see local capacity and Nigerian content playing in quality improvement?
Philip: A huge one. Under the Local Content Act, projects must engage Nigerian firms and professionals. But quality must not be compromised. Agencies like NCDMB are working to train welders and inspectors to international standards. If we build local capacity with the right skills and certifications, we reduce reliance on foreign services while improving quality outcomes. It’s a win-win.
Q: Regulations require competence, but results often vary. What’s missing in terms of people and culture?
Philip: Compliance on paper doesn’t always translate to capability in the field. A certificate alone doesn’t guarantee competence. What’s needed is a layered approach: pair certified personnel with structured on-the-job assessments; mentor critical roles like welders and inspectors; and tailor training programs to address recurring themes from non-conformance reports. One of the biggest shifts happens when supervisors are held accountable when metrics like rework rates and inspection and test plan (ITP) compliance carry the same weight as safety KPIs, behaviours start to change. That’s how you build a culture where quality becomes everyone’s responsibility
Q: One last question, is there a business case for prioritising quality in Nigeria’s EPC projects?
Philip: Absolutely. Every naira spent on preventing a defect can save many times more in failure losses. Organisations that manage quality effectively finish closer to budget, avoid shutdowns, and gain credibility. In a sector as capital-intensive and visible as oil and gas, your reputation for quality can make or break future investment. So yes, investing in quality is not just a technical necessity; it’s a strategic advantage.
Mr Philip’s insights provide a sobering yet actionable perspective on quality in Nigeria’s oil and gas projects. As the industry seeks to improve performance, one message rings clear: when it comes to quality, cutting corners comes at a heavy cost.
