Local content law and how the law has influenced growth of indigenous oil companies
What the Nigerian Content law has done for everybody is to make the international oil companies( IOCs) to allow us demonstrate our skills in the Oil and Gas industry and to see if we can do the jobs or not. That’s the most difficult part of this job. The IOCs have very expensive equipment and they cannot just give it to mediocres. So, Nigerian Content opens the field and we are able to participate in the upstream sector of the industry door.
From initiative, it became a directive, we thank God, Mr. President and everyone that worked on it including Ernest Nwapa of the Nigerian National Petroleum Corporation (NNPC), and most importantly, Diezani Alison-Madueke, Petroleum minister. She actually pushed the bill until it was signed into law.
Seriously, it is no stopping because now it is illegal for IOCs to reject indigenous companies from participation if we can demonstrate capacity and if we have the equipment to get jobs.
Therefore, without Nigerian Content, truly speaking, nothing would have happened.
I think the multiplier effect of that in this economy is incomprehensible. If you think about it, a vessel we are paying $1.35 million every month to a foreign company (the money is wired out), is now retained in a local bank.
Our company, Marine Platform, for example now we have about 160 Nigerians, and we have young Nigerian engineers we sent abroad who are making use of those opportunities. You can imagine if there are 10-20 of such companies they will have ripple effects on the economy.
Of course, there are other service companies; we use companies that supply food, lubes and so on. We have created value and that’s what I think we should promote for the right reasons.
Truly speaking, we started this company when it was Nigerian Content Initiative. I remember it was in 2002. That was the enabler. We saw that we had enablers and we must now prove that we can do the job. It’s not just about our company being indigenous, now we must give comfort to the International Oil Companies (IOCs). They must be able to accept our jobs.
What’s the effect of cabotage law on your operation?
Cabotage law is fantastic now because it is a two-edged sword. We have Nigerian Content law and we have cabotage law. Today, if we fail as a people with these two laws, then truly speaking we have failed the generation yet unborn.
But some of the IOCs also complained that some of the vessels being utilised by indigenous companies are below industry standards?
That’s what I said. Nigeria laws and cabotage laws are only enablers. They have opened doors. But please that doesn’t mean we should go there and do rubbish work. No, it would be counter-productive for everybody. Take for instance, if you engage an electrician in your house, would you let him put wires that will burn down your house? No. So, we should not say because of Nigerian Content or cabotage that we should go and bring scraps? No.
So, we should first be serious: we should be ready to create businesses that will outlive us. I want to die and smile that I have left something behind.
What is the focus of Marine Platform as an indigenous firm?
Marine Platform’s core focus is in subsea solutions. What I mean by that is we should try to be visionary and I know that the land and the swamp is actually the areas left for indigenous companies by the foreign companies because the kind of assets and the finances required for deepwater support is very huge.
So, we choose to go to that area where it would be very challenging, and so far, so good, God has been faithful, we have succeeded.
It requires special assets called Remotely Operated Vehicles (ROVs). We started renting but we ploughed back all our profitability and started acquiring. Today, we have acquired eight of them. Each cost $6 million.
The vessels which we used to deploy these ROVs in deepwater areas; we are talking about depth of an estimated 3 kilometres below the sea. These are big vessels and not the small ones.
We chartered the first vessel like I said earlier; it is the same strategy. We would collect revenues and profits. We don’t spend, we were always keeping it by the side with the support of Skye Bank, a Nigerian bank that understands how to handle indigenous companies.
