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Why indigenous oil companies are not in deepwater operations–CEO, Oilserv

By Sebastine Obasi

THE Chief Executive Officer of Oilserv, an oil and gas, engineering and construction company, Emeka Okwuosa has identified factors militating against movement of indigenous oil companies into deepwater operations.

Speaking on the sidelines of the just ended Offshore Technology Conference, OTC, organized by the Petroleum Technology Association of Nigeria, PETAN, in Houston, Texas, United States of America, Okwuosa identified capacity building, collaboration and technology as necessary issues that must be embraced by indigenous companies to be able to compete favourably with the international oil companies, IOCs, in deepwater operations. He said: “We require assembling capacity and integrating that capacity by working together in other to have synergy and be able to deal with bigger scope. But we are in the integration of FPSO (Floating, Production, Storage and Offloading) which is the issue of topsides. Nigerians are in drilling, pipelines, flow-risers. We are doing a lot but it is very competitive and capital intensive and we have to slowly build it up as soon as we can because we have proven capacity but we need to do more because there is so much out there. “It is the Nigerian factor. Everyone wants to do things in his own way and it is not the way to go. If you go to houses with 20 flats, instead of one tenant providing energy and everyone connects to it, you will see everybody with his own generator. It is a Nigerian factor. It is about understanding that the way to create value requires working together and not as an individual and we are going to get there.”

Okwuosa advocated for collaboration and synergy between PETAN members to be able to handle bigger jobs and compete with the IOCs. He said: “We have been adding value but not the level we desire. So the way we can achieve this is by collaborating and synergizing between entities like PETAN and all PETAN members and be able to handle bigger scope and compete with international service providers.

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“We are already operating in that terrain in reality. When you say deepwater operation, you look at it from two different points of views. Are you looking at exploration and production (E&P), which is ownership or are you looking at services. I will talk from services point of view. Nigerians have been participating in services in Bonga, Akpo, Usan. All these have had Nigerians’ input. There are two key issues with participation in deep-water arena. It is about technology and capital. Both will take time normally to scale up. Nigerians are participating but we are only scratching the surface.

There is still more opportunities for participation.”

As regards incorporating in the operations of Oilserv, the CEO said: “We are already incorporating technology in our operations. Many years ago, you could not find any Nigerian company doing horizontal directional drilling. You would have had to go abroad for people to come and do it. We have deployed that. We have been able to cross rivers 48 inches’ pipeline which would mean drilling and opening the line to 64′ which is a major challenge because it collapses a lot. We are encouraging technology a lot.”

Also speaking on the $2.8 billion Ajaokuta –Kaduna –Kano pipeline project, Okwuosa said: “AKK project is a very unique project, not just what it would achieve, which is to be able to move gas to northern part of Nigeria and create availability of energy to drive industries and create job opportunities. North does not have energy, unemployment continues, security problem continues, everybody will suffer. “Secondly, AKK is significant because it is the first time such project of that magnitude is being done as EPC and Finance. It is not like the previous projects where NNPC and other IOCs award you a project and pay for it and you go ahead and execute and collect your money. We are providing the money and to provide such amount of money, the total value of that project for the two lots comes to $2.8billion. This is not a kind of money you raise in Nigeria. You have to go and raise that capital outside and for you to raise it, you need security. “That security instrument is a process and part of it requires the Federal Government comes in. For instance, if you are backing up the financing with the tariff you will raise from that pipeline, don’t forget that most of that tariff for example will be in naira. A financier who is overseas doesn’t know what you are talking about in naira.  You have to provide an instrument of convertibility that has to come from the Central Bank of Nigeria, CBN, guaranteed that every collection in naira will be immediately converted to dollars. “That’s a typical instrument. These things take time to get through the government agencies.  We are going through that process and we are almost there. We have almost finalized the security and we have also started with the engineering. As we speak, the AKK has started, that is the point I’m making.”

 

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