he General Manager, Eko Support Services Limited (ESSL), Lagos, Mr. Seni Edu, spoke to Sunday Okobi, Sandra Ukele and Bonny Oriarehu on various issues and how his firm is offering port and shore-based services in the maritime, oil and gas industries, among other things. Excerpts:
Can we have an insight to your background and what your company does in the maritime sector of the economy?
I will start by saying my name is Mr. Seni Edu. I am the General Manager of Eko Support Services Limited (ESSL). Our company is a terminal operator in the Apapa Port, Lagos. It offers both terminal operations and shore-based services to the upstream oil and gas industry. We handle cargoes too. However, they are predominantly oil and gas related cargoes, including project and commercial cargoes.
When I say oil and gas related cargoes, I do not mean petroleum products. This is because we have nothing to do with petroleum products. I mean equipment and materials going offshore for both the international oil and gas companies (IOCs), as well as indigenous exploration and production (E and P) firms and their service contractors.
Our company receives two types of vessels here, the normal ocean-going vessels and the service boat, which operates between the shore base and the offshore rigs.
Currently, we are undergoing massive investment to create additional capacity in the Western Zone to support offshore operations. Traditionally, there have not been a lot of oil and gas exploration activities in Lagos or support services within the state.
We are currently rebuilding our facilities and constructing a new jetty at the cost of $124 million. Once it is completed, it is going to give us 400 metres of quayside at 12.5 metres draught at low water which will be the deepest draught in Lagos and a total area of 75,000 square metres.
In addition, we are going to have a new water treatment plant, offices, relayed stacking area close circuit television (CCTV) and access control. It is going to be a modern state-of-the-art port facility in the state mainly for oil and gas related cargoes but also, some project cargoes like major infrastructure projects for cement factory, power plant or something of that nature.
Moreover, we would be handling a little bit of commercial cargoes to alleviate the congestion in the port.
In what way is your firm different from others doing similar things in the maritime sector?
Each company offers something different. We, as an oil services company, are the only one located within a port facility in Lagos. Therefore, we have good access by road and water which is important for logistics as opposed to being situated on an Island. Secondly, we have an edge over other players because being in the port gives us the platform to handle and clear import cargoes directly on the ASYCUDA system with the Nigerian Customs Service.
Although, there are other services we are not really providing now such as major fabrication because of space restriction, as soon as we have enough space that would no longer be a problem.
However, our focus is to constantly find ways to add capacity and provide good competitive services. This means you have to pay attention to what the client wants and try and offer them the service effectively. One should not take advantage of his clients due to paucity of suitable alternatives.
Also, as part of our philosophy, we listen to our clients, pay attention to their demands and provide adequate support services for them since they are actually paying our bills. For clients, the services are never too cheap. They always want a discount. Therefore, it rests on us to determine what the prevailing market price is, and then offer competitive pricing system. These have kept us going forward in the industry.
What are the challenges you encounter in your operations and how have you been tackling them?
We had challenges initially because the services we provide are to the IOCs. The oil and gas industry‚Äôs requirements are different from the normal clients‚Äô requirements. As a wholly Nigerian-owned company, which is providing such services to them, at the initial stage they may not have the confidence that we could provide the required quality of such service. We therefore needed to build that trust first. They were not used to working with a company wholly owned by Nigerians, and also not used to working in Lagos.
Besides, the nature of the operation is different; it is not the same as handling a container of consumable going to the shop for immediate sale. If a container is delayed for two or three days, demurrage would have to be paid for. However, in the upstream operations, if one does not deliver what is meant to be delivered at the right time to the rig, the costs could be very high.
The daily rig rental cost might be up to $500,000 per day and you do not want to be responsible for delaying the operations at the rig. Those are the likely challenges we encounter.
Again, they would want to ensure that your personnel are properly trained, provide all the necessary equipment, make sure all certifications are current, and put all the right procedure, policies and safety records in place. All these would be documented and filed correctly as a proof that you are consistent with the best practices. These are some of the initial challenges we faced. Even though we had the experiences, we had to ensure we kept on training and re-training our workers. You have to continuously develop your people.
In what ways did the changes in the management of the Nigerian Ports Authority (NPA) affect your company operations?
The first challenge was to ensure we had the right people to build capacity with, while the second and largest test was to develop our infrastructure due to the state of the terminal we inherited from Nigerian Port Authority (NPA) under lease at the end of 2005. 2006 was the year we started full operations. In 2006 and 2007, there were not so much activities simply because the facility was run down.
Then in 2008 we had a new management and new shareholders. Our focus was on capacity building. NPA had planned to develop this place in the past as part of their port development plan. They had done phase 1 of the port redevelopment and ‚ÄòBull Nose‚Äô was earmarked for the development in phase 2 but was not approved before the concession of the port.
We said to them, ‚Äòwe want to adopt your development plan, develop on your behalf and have a 20-year concession after development. At the end of the day, NPA is the landlord and we have the initial 20-year renewable concession which allows us to recoup our investments.
We still had a lot of challenges because we had to send a proposal to NPA which was taken to the Ministry of Transport to the Bureau of Public Enterprise (BPE) and finally to the Federal Executive Council (FEC) for approval. When it got to FEC, it was pushed back because there was a problem with the BPE. The BPE objected, saying it was not tendered, meaning it was not advertised in the national newspapers.
So we had to go back again, advertise and do our homework properly. So this proposal which we started in 2008 was approval in 2011, 4 years after instead of about eight months. While we were waiting for the approval, we also ensured the jetty was being put into proper use. We had to continue working to repair and build the quayside suitable for usage, and we had to find the safest ways to carry out operations often by spending extra money. It was tasking.
Against the backdrop of reports of increased pirates‚Äô activities in Nigerian territorial waters, how do you cope with your operations?
Well, we are not affected directly by pirates‚Äô activities because of our location. However, some of our clients are seriously affected by piracy. It is matter of serious concern to expatriate crews who are coming from Europe to Nigeria for the first time. In 2008, when insecurity adversely affected maritime operations in Port Harcourt, Rivers State, many of the foreign companies were forced to carry out their operations from Lagos.
It was a serious problem because those (expatriates) traveling by road had security escort with them, while those travelling from Port Harcourt ports to the rigs location on the ocean, could not that without security agents. But for us here in Lagos, we hardly experience such situation.
However, there are parts of Lagos waters where insecurity used to pose problems but Nigerian Maritime Safety Administration Agency (NIMASA) and NPA are on top of the situation. A few years ago, there was also the bombing at the Atlas Cove in Lagos. The incident shook the foundation of our office.
What do you think is the solution to piracy in Nigeria‚Äôs territorial waters?
Well, the issue of piracy affects everyone. Of course, if you want to do business with Eko Support Service and you need to move the equipment off-shore to the rigs, and there is this consistent attack on the workers and their activities, it would be difficult to attract investors to invest in the sector, and in turn, affect us negatively.
Without investors, the economy suffers, so government agencies such as NIMASA and the Navy should set out measures to police the waterways effectively. We know how piracy has destroyed the economy and socio-political development of many countries such as Somalia and its environs.
We do not wish to experience such here. Therefore, the government must at all time provide support for security agencies to keep nefarious activities of pirates in check. If pirate activities are left to flourish, there is every tendency that they would move to inland one day. Like as I said earlier, we are not directly affected by piracy.
In what way does the Local Content Policy of the Federal Government affect the operations of your firm?
We are adhering to the Local Content Policy of the Federal Government. As I said earlier, we are a fully owned Nigerian company. We have only one expatriate in our employment and because of the nature of the services we provide, everything is done here. Local content policy as we understand it is laudable policy that would really help to expand the Nigerian oil and gas knowledge base and assist with keeping more foreign exchange in country.
However, for the benefits to be fully felt; there is need to have more projects handled by Nigerians. Right now projects are a little bit slow because most companies are waiting for legislation on the Petroleum Industry Bill (PIB) presently before the National Assembly.
How does the Petroleum Industry Bill (PIB) affect your company?
The PIB affects us because without the bill becoming law, projects would be stalled, but fortunately for us there are new projects coming on stream in the country. I said fortunately because the construction, the ongoing quayside project, which we believe will coincide with the signing of the bill. We do not know when the PIB would be signed. But if we spend this amount of money doing this redevelopment project and there is no PIB, investors divert their investment somewhere else, there would be a problem in the industry which would in turn affect us.
Also, if the bill is not signed, the market we predominantly set up to provide services to clients would be getting smaller, and this is the same way it would affect other Nigerian companies providing specialised services in the oil and gas industry. Therefore even with the adherence to the local content policy and many local companies that are capable and willing to provide services, without the bill being signed, it would be difficult to provide the services. In that way, many companies might go down.
Furthermore, I think the government has realised that the bill is crucial and has to be signed as soon as possible. Presently, the content of the bill is what is posing the delay. There are a lot of different sides and different views. Many stakeholders are projecting different views on the provisions of the bill based on their interests.
In the end, we need to have a harmonised bill essential to promote Nigerian oil and gas companies and Nigerian service providers, and not making the IOC companies run away because most IOCs have been here for 30 to 40 years and they still have existing assets. Also, we have to build capacity and not continue to depend on IOCs to do everything for us. We cannot expect them to leave overnight.
How are you funding the quayside project?
We are building a new 400 metres of quayside which involves going 30 meters into the channel at one end coming 400 metres across, dredging and reclaiming 20,000 squares metres of additional land. We have been doing pilling. There is going to be dredging and the construction of the jetty which is going to be a 16-core company wall which has not been used in Lagos or Nigeria before.
There is going to be deck-on-pile. At this level, the project is funded by loan from the banks as well as the shareholders who have taken the responsibility of providing funds to make the project a success, and there is also the payment plans based on the revenue stream.
What is the strength of your work-force?
Currently, we have about 100 employees including contract staff on the base. If our operation demands that we need more hands, we increase the number of workers, especially the dock and indirect workers.