VALENTINE UGBEIDE is the managing director and chief executive officer of Gremoore Limited, an oil servicing company that has achieved a phenomenal growth on account of local content policy. In this interview with OLUSOLA BELLO, he speaks on the support his company recieve from IOCs.
What do you see as the key achievements of the Nigerian Content Development policy in the past 10 years? There are many achievements of the Nigerian Content policy in the last decade, some of which can be summarized into following areas:
In the last 10 years and especially under Simi Wabote the provision of funding and incentives to Nigerian Oil and Gas Industry operators have been a great milestone achievement of the board. The $200 million Nigerian Content Intervention Fund (NCI Fund) established in August 2017 and the NCI Fund was also increased to $350 million. These have helped indigenous companies to overcome some of the funding challenges they usually encounter.
The creation of Project100 is another great thing that the board has done. In this case, the Board identified 100 oil and gas start-ups and deployed special institutional interventions for their incubation. The Board has also Introduced Automation of NCDMB’S Processes and Service Level Agreement (SLAS) between NCDMB and critical oil and gas operating companies.
It has also reengineered and deployed a new Monitoring and Compliance Template for Nigerian Content Monitoring and Evaluation (M&E). Consequently, we continue to see stronger enforcement of the requirements of Nigerian Content in tendering for all major projects with the IOCS and NOCS, and non-compliance remains a fatal flaw. This has significantly increased opportunities for Nigerian companies like Gremoore to emerge as major players.
What are your views on the competitiveness of the Nigeria’s Oil and Gas Industry?
International Oil Companies such as Exxonmobil, Total, Shell, Chevron, Agip have created a contracting strategy and enabling environment where indigenous contractors with capacity are able to compete on a level playing field and win on the basis of merit anywhere. This ensures lower contract costs and value delivery to the Client.
It is encouraging to see many Nigerian contractors who are listed on the NIPEX platform to tender for projects in Nigeria. However, only a few can actually compete and deliver on these projects.
For instance, our company is an emerging leader amongst Nigerian contractors in delivering Engineering, Procurement, Construction and Installation (EPCI) projects. This is evident in our achievements till date, which is largely due to adherence to our core values – Safety, Integrity and Performance (SIP). So a good number of Nigeria companies have the capacities to do good jobs
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How is COVID-19 pandemic a challenge to the industry?
As we all know, the current COVID-19 pandemic has created an unprecedented global crisis for every country and business sector. However, I believe that Nigeria’s oil and gas industry will emerge from the COVID-19 era stronger. To achieve this, we must do things differently.
For mutual survival during this difficult period, there must be partnership and collaboration with all stakeholders on cost reduction where practical without compromising safety and quality.
Therefore, Gremoore felt obligated to share the pains of its clients who are experiencing significant operating cost increases with low income due to oil price drop. We have therefore discounted our contract rates knowing that our client such as Exxonmobil has always been supportive in building in-country capacity and creating employment. We also collaborate with our clients to deploy COVID-19 compliant solutions to where necessary.
You must also realise that the Pandamic has slowed down a lot of activities in the oil and gas industry across the globe. Nigeria is not an exemption. The industry here is facing the problems others are facing. The price of crude has been ridiculously low. Investors are waiting to see how soon the industry can recover from the effect of the pandemic. It has disrupted a lot of plans and projects that are supposed to be executed have differed while some are being reviewed. The oil servicing industry is most hit because if the international oil companies are not awarding contracts the service industry would not make much progress.
The PIB has been sent to National Assembly, any hope on that?
One of the boldest steps President Muhammadu Buhari has taken so far is sending the Petroleum Industry Bill (PIB) to the National Assembly.
I want to personally thank the president for it and the minister of state for Petroleum Resources, Timipre Sylva. I think he was quite bold for what he did.
The PIB has been going on for years now and it has seen about three administrations, yet we have not come to this kind of milestone. The PIB is a gift to the nation.
I have not seen the details of the bill but the little I have seen so far shows it is for expansion of the industry, it is for opportunities for Nigerians and foreign investors to bring more funds into the country.
Now investors would no longer see an entity like Nigerian National Petroleum Corporation (NNPC) as government parastatal, but a company that can be invested in when the bill finally becomes a law. The NNPC is going to be a company on its own and it must be profitable and has to give dividends to the government.
There will be opportunities to revisit all the assets we have onshore, offshore, deep water and shallow water and a lot of investors would want to put money into those assets. The investors would input a lot of local content into the industry.
The law will also address the gas issue. We have too much gas in this country. It will also give guides on how gas should be utilised. I think this the best thing they have done in the country.
I hope it does not slow down at the National Assembly really.
Can you let us have an insight into your company’s activities and capabilities?
Gremoore Limited, is a 100 percent Nigerian company. It aims is to be the leading indigenous provider of Offshore Engineering, Procurement, Construction and Installation ( EPCI) associated with offshore field development and maintenance. Also, it offers professional services in Shallow Water Conventional Pipelay, Brownfield Maintenance/hookUp, Operations and Maintenance, Fabrication of Onshore/offshore Infrastructure and Deepwater/ Subsea, Umbilicals, Risers & Flowlines (SURF) and Project Management Services.
The company has over a 100 Nigerian Technical and Project Support Staff, together with over 350 Offshore Construction and Fabrication workers. Our execution philosophy is based on our core values of Safety, Integrity and Performance. We have a management team comprised of seasoned Nigerian and expatriate professionals with over 100 years of combined international experience who have worked with Halliburton, Saipem, Subsea 7, Exxonmobil, Shell, Chevron and Total.
As an organisation, what are your milestone achievements?
Within the last three years, the company has successfully completed multi-million dollar EPCI projects meeting the safety, quality, cost, and schedule targets of our key client – Exxonmobil.
We have also achieved the commendable milestone of 2 Million Safe Man-hours in December 2019 without a Lost Time Incident. In 2020, we entered into an exclusive partnership with Deepocean, a leading subsea company to provide subsea services in Nigeria. It has a management system that is consistent with ISO 9001 requirements.
At the 2019 Mobil Producing Nigeria Contractor’s Safety Forum, Gremoore received the Best Overall Performance Award. This award is the highest honour that all Mobil Producing Nigeria (Exxonmobil) vendors ( both international and local) generally aspire to achieve.
Could you shed more light about your first experience and support received from your client, Exxonmoble
Our first break was in May 2017 when we were awarded the Exxonmobil Revamp Platform Program Contract and as soon as we signed off on the contract, we were required to mobilise offshore within a very short period to undertake an emergency repair on an Offshore Platform operated by Exxonmobil. With a good collaboration between the Exxonmobil and Gremoore Teams, we successfully completed this project ahead of schedule. As a result of our performance, we were awarded additional works over a period of two years which were all completed without a Lost Time Injury (LTI).
Exxonmobil leadership showed a strong commitment to Nigerian Content development by supporting several Nigerian companies including Gremoore. Its affiliates in Nigeria have consistently provided an even playing field and supported Nigerian contractors in overcoming their peculiar teething challenges such as cashflow.
How has your company managed the financial requirements to successfully deliver major Oil and Gas projects?
Exxonmobil management recognised the importance of cashflow management for successful project delivery. The payment processes implemented by Exxonmobil helped ensure that approved invoices were paid in a timely manner which enabled contractors such as Gremoore to meet their financial obligations to employees, subcontractors and suppliers. This enabled us properly fund our projects without resorting to expensive financial facilities from commercial banks.
Tell us about your impacted on your host communities?
Gremoore actively support the communities where it operates through various programs including; Fight Against Stroke (FAST) Challenge, we are a member of a Coalition of Companies that support the fight against HIV/ Aids, provides employment for host community workers and Neighbourhood environmental sanitation.
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