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How innovative Chevron strategy boosts Local Content in Nigeria’s oil, gas industry -BGI boss

The development of Local Content has become a reality in Nigeria, even though some challenges abound. In this interview with Udeme Akpan, the Managing director of B G I Energy Services Ltd, Mr. Edmund Tiemo, currently one of the successful indigenous companies, comment on a wide range of issues, including the roles of Chevron Nigeria Limited in boosting local content in the country.

Can you comment on your role in Egbema & Gbaramatu Communities Development Foundation, (EGCDF)?

I was a founding member and pioneer General Secretary of a Grass-root Community Development Organisation known as Egbema & Gbaramatu Communities Development Foundation, (EGCDF). While my good friend and colleague, Dr. I. C. Tolar, was the first Chairman of the Organisation from October 2005 to April 2009. I was elected Chairman of the Foundation from April 2009 to April 2012, when I handed over the chairmanship to my successor. It is pertinent to mention that the EGCDF is a tripartite organisation established in October 2005 by: Egbema & Gbaramatu Communities in Warri North and Warri South West Local Government Areas, Government of Delta State and Chevron Nigeria Limited.

The Organisation is being funded by Chevron with an annual cash donation plus the provision of Capacity Building resources for the development of the Communities by the Communities themselves within the framework of a Global Memorandum of Understanding (GMoU). Presently, I manage my own family business outfit, known as BGI Energy Services Limited (Formerly Broad Global Investment Limited).

Mr. Edmund Tiemo

Would you tell us more about your company, BGI Energy Services Ltd and the kind of services you provide?

BGI Energy Services Limited was incorporated in 1991 as Broad Global Investment Limited. BGI Energy Services Limited provides Services to the Oil and Gas Industry with Chevron as our main client. Our core business areas include; Electrical & Instrumentation (installation & Control) and Maintenance. We also provide Technical Support Services for the industry and we have been consistently recognized by our clients for our quality performance. BGI has since diversified into many areas.

How do you interact with Chevron Nigeria Limited (CNL) in your business and how has this affected your firm’s activities?

The usual means companies in other industries interact with their clients. I am talking about emails, phone calls, letters, meetings, forums and the likes. Good communication ensures a clear understanding of issues, placing all parties on the same page. It clears misunderstandings, misrepresentations and helps to facilitate quality service delivery and customer satisfaction. If you have any doubts on any issue, it is better to seek clarification from the other party. This has helped us tremendously and improved our relationship with our client.

How do you assess Chevron that prides itself as a pioneer in consistently supporting the growth and human capacity development of small and medium scale businesses, especially the community-based enterprises?

Initially, Chevron use to deal with the Regional Development Committees within its areas of operation on an individual contact basis. It transpired that that system was not fruitful, both to the Communities and the Company. Most often, that system resulted in failed promises, bad blood, a hostile and an unconducive environment for the Company to operate and realise its core business objectives.

However, following the Company’s re-entry program after the Warri crisis, Chevron came up with an innovative community engagement initiative by grouping the Communities within its areas of operation into Regional Development Councils (RDCs) and encourages the Communities to own their own development process under a GMoU. The RDCs became a platform for interaction between the Company & Communities using continuous and constructive engagement as a tool for achieving peace and development of the Communities.

There is no doubt whatsoever that Chevron did a lot to encourage Local Community Contractors to incorporate business outfits and develop their capacity to manage businesses of their own and compete fairly even in the open market for jobs. When the construction started on the EGTL Plant in Escravos, it was believed that the environment was unfriendly to large scale investment such as the EGTL Project.

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However, Chevron overcame this constraint by having the buy-in and the commitment of the local communities to the project to be an integral part of the project execution. Over 300 Local Community Contractors were engaged to work in the EGTL project. BGI was one of those LCCs that were nurtured by Chevron under its Local Community Contractors Program. While some of these companies may have fallen by the way side, a lot of LCCs that were part of the EGTL Construction project have since graduated into companies that today can stand on their own.

It is important to mention here that the LCCs had no expertise, no experience, no access to funding from any bank, but Chevron demonstrated utmost faith in the ability of these rag-tag contractors to perform. It was an unprecedented demonstration of commitment. For example, the local contractors were contracted to procure heavy duty equipment from vendors abroad and also engage skilled & unskilled labour for the execution of their scope of the project. Because of the background of these Community Contractors, no bank was ready to touch us with a long pole. It is on record that Chevron trusted the Local Community Contractors and released to them large sums of money running into billions of naira as advance payment to mobilize them, procure equipment and pay the salaries of their workers without any form of security whatsoever.

At the end of the day, the project was successfully completed and till date some of us are still with the project. None of the LCCs absconded with the advance payments released to them by Chevron. So a solid basis for trust and good relationship had been built between Chevron and its Community Contractors, a relationship that thrives on dialogue and constructive engagement to the mutual benefit of both parties. Of course, the ground work for this wonderful achievement on the part of Chevron and the Communities was laid with the formation of the RDCs, which acted as a platform for interaction between the company and the communities.

What is your evaluation of CNL’s contribution to Local Community Content and Nigerian Content development?

As I have mentioned earlier, Chevron is doing wonderfully well in terms of empowerment and capacity building of Local Communities. Of course, CNL would know that there are opportunities for improvement and we continue to encourage them to do so, and that other all major operators in the Oil & Gas industry should follow in the footsteps of Chevron.

What is your view on the implementation of the Nigerian Content Act generally by the IOCs?

Let me attempt to explain that from perspectives. First, it is important to remember where we are coming from even as we focus on our desired destination. Some years back, the Oil and Gas service sector was inundated with foreign companies that were providing services that Local Community Contractors could supply. Participation of Nigerian companies was abysmally low. Today, IOCs have engaged many Nigerian companies to provide various services to support their operations.

What are your comments on the impact of government policies on NCD/LCC development?

Developing local contractors used to be the preserve of corporate social responsibility in many oil companies. But the Nigerian Oil and Gas Industry Development (NOGICD) Act and the consequent establishment of the Nigerian Content Development and Monitoring Board (NCDMB) have made it mandatory for IOCs to comply with Nigerian Content requirements.

What advice do you have for other SMEs?

My advice is that as small scale businesses, the LCCs and other Community Contractors should place premium on matters of integrity, quality service delivery and compliance with statutory requirement. Above all, we must constantly be on the lookout for new businesses in order to grow and remain in business.

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