WELL DONE

Nigeria 2015 | ENERGY | INTERVIEW

TBY talks to Emeka Okwuosa, Chairman & CEO of Oilserv Limited, on the African oil and gas sector, driving economic growth, and the Petroleum Industry Bill.

Emeka Okwuosa
BIOGRAPHY
A 1982 graduate of Electronics and Electrical Engineering from the University of Ile-Ife, Emeka Okwuosa is a seasoned engineer, administrator, entrepreneur, and visionary with over 30 years of experience in different areas of engineering. These activities have spanned Europe (France and Scotland), North Africa (Libya), West Africa (Mauritania, Senegal, Côte D’Ivoire, Ghana), Gulf of Guinea/Central Africa (Nigeria, Benin, Cameroon, Gabon, Congo, and Angola), and Indonesia in positions ranging from Field Engineer to Technical Manager. Emeka is the founder, Chairman, and Chief Executive Officer of Oilserv Ltd, Frazimex Ltd, Frazimex Energy Services Ltd, Frazimex Engineering Ltd, Frazpower Ltd, and Frazoil Ltd.

Since 1995, Oilserv has provided onshore and offshore services in Africa's oil and gas sector. Could you elaborate on the way your portfolio has developed over the years and the current flagship projects you are engaged in?

We started operations fully in 1995, and worked exclusively for Shell over the next five years. After this, we diversified into working for other IOCs and for Nigerian LNG in maintaining their pipeline transmission systems. We are recognized for our strong technical background based on my vision and experience. I have worked for Schlumberger worldwide, and I returned to Nigeria in 1994 with the vision of building the country's capacity in oil and gas technical services. We started by building flow lines for Shell and eventually began building trunk lines and pipelines for them, after which we started building facilities like manifold stations, including the largest such facility in Nigeria. We have grown to the point where our service delivery covers entire pipelines and flow lines of all sizes. The vast majority of pipelines we construct today are actually gas, rather than oil pipelines, as more and more gas pipelines are being built as distributions systems throughout the country. We are the primary indigenous construction company in this sector, having built over 30 pipelines, far exceeding the number that any other indigenous company has created. Oilserv is the only Nigerian company with the capacity to construct 10 pipeline projects simultaneously, and we are currently working on nine. On top of that, we are building a 48-inch diameter pipeline, which will be Africa's largest. We are talking about a full EPC contract, including maintenance for the four months following construction, which is a capacity that no other contractor can ensure. We employ more than 500 people and our activities are spread all across Nigeria, and we also run additional operations in other African countries.

How did you manage to position the company as the only indigenous company to provide world-class services?

Capacity building is the key. I have a strong engineering background; therefore, Oilserv is driven by my vision as an engineer. We started well before the Local Content Act was passed, and were already competing with international companies, getting jobs, and delivering these efficiently. The high quality of our delivery has given us a strong track record, but it is not just about the delivery, as we are cost-effective, too. We deliver far cheaper results than the multinationals can, and our robust engineering background is the reason for this. From inception, we have trained our people in using a range of heavy-duty and specialized equipment, and we continue to do this. We choose between 30 and 40 graduates annually for our graduate program. As part of Nigeria's university curriculum today is not adapted to specific industries, we have to guide graduates in the right direction in the oil and gas industry, whereby we build capacity internally and train people to instill in them our culture of quality delivery, which is the only way to please clients. We are always abreast of the latest technology in pipeline construction. We are one of the few companies with the capacity to deploy and operate horizontal directional drilling systems that enable us to preserve ecosystems, and the first to deploy automatic and semi automatic welding systems on a large scale, when 90% of today's welding systems are still manual. This significantly increases the amount of joints we can weld in a day. Furthermore, we have brought more Volvo PL pipe layers to Nigeria, and so capacity building and technological advancement has brought us to where we are today. Moreover, we reinvest in our business, resulting in a huge asset base spread over a large area, and our ability to handle this many projects at the same time.

How can the Nigerian petroleum industry become a driver of sustainable economic growth?

We need to have a good system for the management of the industry and must implement a regulatory system that is fit for this purpose; one that adapts to the environment and to changes within the global oil and gas industry. Over the past five years, for example, the impact of US shale gas production has been significant. Similarly, the crisis of 2008 impacted heavily on the oil and gas business. To offset external influences such as these, we need to adapt and strategize based on a long-term perspective. This requires proper management at a national level. Unfortunately, in most developing countries, the government tends to have a disproportionate level of control over the industry. Instead, it should be run as both a government activity and as a business, which can be difficult, as politics and commerce do not always go hand-in-hand unless there is a proper focus. This is not specific to Nigeria. Proper planning, and most importantly, an ability to build up capacity in the service industry will mitigate these effects. Only then are you transferring wealth to the country, because capacity is being built sustainably, while also developing technological capabilities within the industry that can be sustained and even exported.

Does the recent IOC divestment play into this by creating room for local capacity building?

On face value, it is encouraging for Nigerian players. However, this is E&P, which is a different issue, and will require huge investment to increase the capacity of the reserve in order to create value. We need to create a long-term development plan for this. What has happened is excellent, and as you can see there are Nigerian players involved in E&P. These players have to build capacity and spread wealth within the country, and it will also help Nigeria to take full control of certain activities within the oil and gas industry. Overall, however, more has to be done in the long term.

Will the Petroleum Industry Bill (PIB) contribute positively to this future development?

Whether or not it is passed, the industry cannot exist in a vacuum, so we will continue moving. It is better for the industry if the PIB is passed, because both capacity building by the IOCs and the local companies will be impaired if not. Nigeria needs the IOCs and the IOCs need Nigeria. The fact that Shell is divesting does not mean that they have stopped building capacity. They are bringing in new technology and dealing with the big offshore fields, and they have the capacity to spend billions of dollars and also benefit from it. It is a win-win for both Nigeria and the IOCs.

What goals have you set for Oilserv over the next five years?

Over the coming four years, we want to expand into all Sub-Saharan Africa. Today, we have a footprint in Sierra Leone and Togo, and are setting up in Benin. Our operations in Uganda, Kenya, and Tanzania are part of a geographical expansion in alignment with our goal to balance our portfolio across the region and take full advantage of our experience and capacity.