TBY talks to Alaba-Foluso Abayomi, CEO of Richmond Marine & Offshore Logistics Limited, on expanding outward from Lagos and Port Harcourt, the role new legislation can play, and the need for partners beyond the oil and gas industry.

Alaba-Foluso Abayomi
Alaba-Foluso Abayomi holds a BA in chemical engineering from the University of Port Harcourt. Before becoming CEO of Richmond Marine and Offshore Logistics Limited in 2008, he worked for Bella Oil as COO for more than five years.

Richmond Marine & Offshore Logistics Limited started in 2008. What have the company's main achievements been since then?

After registration in 2008, Richmond Marine & Offshore Logistics Limited commenced operations in January 2009 with the leasing of marine vessels to ExxonMobil. We have continued to work with ExxonMobil since then under a direct contract. For this contract, we source vessels from various owners we have partnerships and MoUs with. In 2011, we also acquired our own vessels. We are looking into expanding the company, acquiring more vessels, and moving into countries such as Ghana, Gabon, and Equatorial Guinea. However, we have a major challenge with the downturn in the oil and gas industry. As a result, companies such as ExxonMobil, Total, and Chevron are reducing the rate at which they take offshore marine vessels. New contracts are not coming out; IOCs are just recirculating existing contracts from the last two or three years. If the price of crude oil goes up again I expect the situation to improve. We have three vessels to our name and four other vessels that we manage for other owners. We provide security vessels and personnel and conduct security patrols to safeguard platforms and offshore installations for some IOCs. We also provide escort services for foreign vessels coming into Nigeria.

How will the Petroleum Industry Bill (PIB) impact the oil and gas industry and your operations as a result?

Everything is about funding, and we need more government support for this. Indigenous companies like us have to borrow from the banks at high interest rates. We have to take out loans to acquire vessels for particular projects with IOCs, which makes business difficult. The role of the banking industry is key for our sector and the government should work with the banks and encourage them to lower their rates. We would also appreciate the government's help in removing some Catch-22s; for example, we cannot get loans from the banks to acquire vessels without proof of a contract and we cannot get a contract with an IOC without having the vessel. Settling the repayment terms for the loan is another difficulty; when our client pays us, the bank takes its repayments almost immediately, making cash flow an issue.

How would you describe the business environment and potential partnerships available in Nigeria for international investors?

Right now, we seek international companies to come and partner with us in Nigeria because most of the time IOCs require state-of-the-art vessels for their operations. Due to our limited financial capabilities and banking issues, we find it difficult to meet these requirements. This is a lucrative industry, but as an local company we find it difficult to see the progress we want because it is a highly capital-intensive business. We have the Nigerian content, contracts, and local contacts and knowledge; hence, we can represent a foreign company here. We need them to bring their technical know-how and vessels here to work. At the moment, there are certain contracts that we do not bid for due to a lack of specific vessels. If we had partners with those vessels we could easily carry out the work under those contracts and not miss out.

What are your expectations for 2017 for Richmond Marine & Offshore Logistics?

We seek to diversify away from the oil and gas industry and into agriculture. We are not going into farming, but want to add value to agricultural products grown by local farmers. We are looking at the cleaning, grading, and processing of grains. We also want to produce feed-meal for livestock. We recently went on a trip to China to acquire the machinery we need to get started with this enterprise. We need to seek some loans next. This investment will be based in Lagos State initially under a new company name.