By Michael Eboh
The difficult operating environment and economic recession, notwithstanding, a number of indigenous companies had been able to weather the storm successfully and had continued to take giant strides, using advanced technology and innovative practices.
Some of these companies had continued to make significant investments in expanding their operations and had served as flagships of the Nigerian Content initiative.
The current economic challenges in the country had forced many companies to scale down on their activities while many others had suspended their operations temporarily or closed shop completely.
Specifically, Manufacturers Association of Nigeria, MAN; National Association of Small and Medium Enterprises, NASME, and the Lagos Chamber of Commerce and Industries, LCCI, disclosed that about 272 manufactures and businesses are either ailing or have closed shop since the economic crisis began.
They further stated that over 200,000 jobs had been lost since the crisis began, while many other companies are gearing to lay off more staff.
However, a few companies had been able to weather the storm and had devised means to survive going forward, while some others had been unaffected by the crisis.
Among these category of companies is the Obijackson Group and its subsidiaries. The Group is a major reference point in local content and has continued to deploy technology, delivering high quality services to companies across key sectors, ranging from oil and gas, construction, aviation and fabrication among others.
In spite of the recession, the company is seeking to invest a minimum of $200 million over the next three years, in the construction of a power plant and in building a pipeline to convey gas to the power plants.
Specifically, one of the subsidiaries, Century Power is building a modular power plant in Okija, Anambra State. The company plans to commence with a 465 megawatts (MW) module that would be scaled up ultimately to 2,000mw. A number of companies are already lining up to be hooked up to the power plant.
In addition to building the power plant, the company also plans to build a 65 kilometers power pipeline that would be probably the first and only gas pipeline into the eastern part of Nigeria.
The pipeline, which the company said would cost about $200 million, is going to be built from the OB3 pipeline, which is east to West in the Delta. The company said it would tap gas from that pipeline to Okija.
The company said the pipeline would support the power plant and would also supply gas that would be piped into the eastern region.
“Imagine all the industries in the eastern part of the country that has no gas. Suddenly that opens up the opportunity for them to be more efficient by using gas instead of the generators and other methods of power supply that they get,” said Mr. Simeon Tor-Agbidye, Assistant General Manager, Group Business Development, Nestoil Limited.
Another of the Obijackson subsidiary, Shipside Drydock has emerged as one of the foremost ship maintenance facilities in the region, with a submersible dry dock and maintenance facilities for electronics, instrumentation and mechanical among others.
In particular, the company claimed that by July 2017, companies would no longer have the need to take any vessel less than 110 meters out of the country for repairs or anything, as by then, it would have fully developed its capacity to undertake large jobs in that regard.
Energy Works Technology, another subsidiary, is a fabrication company, involved in fabricating process vessels, infrastructure such as platforms, gas gathering facilities, manifolds among others.
The company recently fabricated some of the vessels for the topsides of the Egina Floating Production, Storage and offloading vessels at its yard at Abuloma, which is set for export to South Korea to be integrated on the main vessel.
The company is also expanding its capacity into the fabrication of super duplex stainless steel, a kind of welding and fabrication that is required for subsea facilities.
Scorpio Drilling, a crude oil drilling company, also recently acquired a rig and has secured a three year work programme for the rig. The company said the rig would be involved in drilling operations for Neconde, its exploration and production (E&P) Joint Venture (JV) with Nigerian Petroleum Development Company, NPDC, while it has adequate capacity to drill for other oil companies as well.
Nestoil, the flagship company of the group is an Engineering, Procurement, Construction and Commissioning, EPCC, company engaged in pipeline and facilities construction.
Two other subsidiaries, B&Q Dredging and Nesthak, a horizontal directional drilling company are currently engaged in a massive dredging project in Bayelsa State and in the laying of pipes under roads and rivers for the OB3 pipeline project respectively.
Particularly, B&Q Dredging, a dredging company, helped in dredging the River Niger for the Second Niger Bridge project, while Nesthak is currently involved in helping to cross the Ase River in the OB3 pipeline project, with the River Niger, being the next target, a distance of 1,800 meters.
Nesthak would be engaged to drill underneath the River Niger to pass the pipeline, so that it is not laid in the water.
The subsidiaries cover quite a significant portion of the oil and gas value chain, providing a lot of value. All of the companies directly employ over 3,000 individuals, making them one of the biggest employers of labour in the private sector in the country today.
As part of its survival strategies, Tor-Agbidye said the company is optimizing its processes so as to become very competitive and is also deploying more equipment and training people to be more efficient.
He said, “All the operators are talking about low cost, high quality; but once we optimize, which is what we are doing now, we would become very competitive; we would have businesses. Even if oil price is $20, we are there; our services would be there for people.
He said the company is moving its crude oil offshore to where it would be loaded, adding that if it does not produce and cannot move its crude, we cannot make money, so people get laid off and facilities get grounded.
On its plans for the future, Mr. Chris Ijeli, Group Head, Business Development, Nestoil Limited, said, “For the future, the project that is upcoming is Zabazaba. It is ENI, Agip. That is an Eni-run project. It is the Zabazaba field. They are going to set up all the facilities, FPSO, subsea facilities, all of that.
“We are currently in the bid stage of this. Everybody is turning in technical and commercial proposals and all of that. That is what is going to fill up the shops for the next few years. After that, they are a couple of other projects that would be coming up. Like there is the Bonga South West, there is Etan, there are several projects that are coming up in the future, but the next big thing is Zabazaba. Everybody is gearing up for Zabazaba.”
In addition, Tor-Agbidye said, “Besides that, right here in the country, there are lots of projects, fabrication projects; there are lots of things that can be done. One mistake that we do most of the time is that we tend to focus on the oil and gas industry.
“But there is a lot out there. Like you go to the bottling companies, they have pressure vessels, they have pipes, and all of those things. You see this, this is a steel roof. We can fabricate this. All of those structures that you see, the steel gates, we can do all of those things. You go the breweries; in fact we can do everything that has to do with fabrication.
“With respect to pipelines, there is a masterplan of gas pipeline for Nigeria. If you go and look at the Nigerian Gas Master Plan, there are a lot of gas pipeline planned for Nigeria and these are high-value projects. There are several bids for these that are coming up over the next few years. Those should provide activity for the EPCC companies as well.
“There is enough for everybody in the market right now. We are able to keep ourselves busy, keep developing, keep transferring knowledge, keep growing people, and keep growing capacity to help the rest of the region grow as well.”