‘We Have Built Capacity through the Local Content Act’ – Uwakwe
Fenog Nigeria Limited, an independent engineering company known for design and construction services to oil and gas, companies and government agencies was founded in 1992 and has carried out major constructions in so many engineering fields particularly in the oil and gas sector. To be a major player in the oil and gas sector, the company recently acquired PD 500 HDD rig at a whopping 40 million dollars. This is in addition to the two PD 250 HDD rigs already in the stock of the company. ENGINEER CHUKWUDI UWAKWE, the General Manager, Spoke with Orient Energy Review on the sideline of the Nigerian Oil and Gas Conference, held in Abuja; about the impact of the Local Content Act to his company. Excerpts.
What is your company known for?
Fenog is a unique company, we are known for Horizontal Directional Drilling, and we are the pioneers of Continuous Horizontal Directional Drillings popularly called CHDD – it is a method of installation of pipeline, a deep burial of pipeline to forestall saboteur, vandalism and any form of sabotage. It is unfortunate that the IOCs are not buying into it, and every day we talk about revenue lost, pipeline vandalism, crude oil lost through third party activities, but this is a method that if applied in our pipeline by installation method, will eliminate totally the pipeline vandalism and theft. So it is a very good method initiated by Fenog Nigeria Limited. We did a job for one of the IOCs where we installed a 20 inch pipeline over 67 km using this method, and that is the most secured pipeline in Nigeria as am talking to you now.
Last year, Fenog received a local content award as the best indigenous company of the year, what are you doing to maintain that standard?
Yes, we have actually done a lot and the award has also pushed us up, and we are doing a lot of things like the pioneering of this CHDD. We are now the best in the whole world having achieved this landmark. In fact we have been able to drill 20” x 3.45 km, it’s not been done anywhere in the World. The award we have received brought us out and has made us to compete with the international companies. We are doing a lot to ensure that as Nigerians, we partake in the oil and gas industry and compete with the international companies, these jobs are for Nigerians and not for the international companies who would take them out of the country, we need the money to remain in Nigeria and help ourselves to employ young Nigerians that are unemployed and eliminate even the pipeline vandalism and all that social vices happening all around us.
In terms of capacity building, what have you done?
In terms of capacity building, well I would speak generally, not just in terms of the award but the Nigerian content Act which has made us build a lot of capacity, in equipment and even in human resources. We have procured an offshore pipe laid patch – a 925 tonnes capacity sited in Warri as am talking to you, we have also acquired a set of swamp equipment, – a swamp laid patch and three service vessels, and the laid patch we have is sea-going, so we are entering into the offshore business, that is where the game is right now.
Do you have enough capacity to go offshore?
We have enough capacity, what do you need? You need a laid patch, an offshore going vessel, you need dive vessels, and we have all that. Our crane capacity as I said is 925 tonnes and is enough to lift any heavy lift offshore. However, we have other Nigerians who have sea going vessels, support vessels, so we go into collaboration, there is no law that say you must have it all, it is for Nigerian contractors to unit together and create a large force to withstand the international companies.
So has the Nigerian content Act been of any benefit to you and in what way?
The Nigerian content Act has been a huge success, where we were before 5 – 6 years ago, and where we are now, you can see that there is a lot of improvement and a lot of success in the Nigerian companies especially Fenog Nigerian Limited. We are the pioneers of the CHDD, a method of installation of pipeline in a continuous horizontal drilling, a method that involve deep burial of pipelines other than going to this conventional method where you bury pipe half a metre that is prone to attach, you bury it close to 20 – 40 meters deep. With that you have eliminates any form of vandalism or any third party on the pipeline. Also in addition to that we have trained Nigerians who are our staff and are now drillers; they can now use the HDD rigs and do the survey aspect of it. Now, we don’t need a white man to drill for us, you go for a job and you see Nigerians, mostly Niger-Deltans doing the job. That is on one part, we have also expanded because we are now going into offshore business. Now the local content Act has brought us out so that we may be able to acquire the sea-going patch, the offshore-going lay patch, the name of the lay patch is Ado Ogene Lay Patch – to show that it is fully a Nigerian vessel and from the Niger-Delta. We also have a sea -going support vessels called Ore–Ogene, in line with that we have been bidding for offshore jobs, several of them, we are in competition with the international companies and we hope to get the job.
While the use of Niger-Delta names for your vessels?
Yes, because we are in Warri, that is where we are situated and that is where we sprang up from and the MD and chairman are also from there. If you are in Warri you cannot go and name your patch with a Hausa or Yoruba name or even an Ibo name, that is why we named those patches with those names so when you see them you know they are from Nigeria, they are from the Niger-Delta.
Apart from Delta, which other states in the Niger Delta can we find Fenog?
You see, we need to start from somewhere, and there is nowhere, not only Niger-Delta, there is nowhere that you will now go and mention Fennog that people will not raise their hands that they need Fennog to come and work for them, because starting from the Niger-Delta – Port Harcourt, Warri, Bayelsa and so on, we are well known; that’s because we practice community content and are from the community. So they like us to come and work because we empower them, we employ them, we make them comfortable, we live with them when we are working, and they are happy working with us, likewise any other place even as far as Dubai, somebody told me that he went as far as Dubai and they told him to go and meet Fenog when he was talking about CHDD, we didn’t know the person. So we are worldwide.
In what ways have you been able to impact on your host communities?
As an indigenous company, a local content company, take for instance in Warri Delta state, of course you cannot have a company in Warri and employ somebody from Lagos, so the indigenes from Warri are gainfully employed one way or the other. It could be a ripple effect, if we employ a son, he will help his mother, and his mother will help her sister even as far as to the market. Now in the community where we operate, whenever we go to the communities there are basic things that we do there, at least throughout the stretch, if the job is going to take six months or more, the people living in that community will be happy because they get stipends from us, and mostly their economy will be improved, workers will come there to work and their economy will also be improved. part from that we’ve had situations where we built water treatment plants for them to enable them have water, we’ve been able to get light for them through a turbine from one of the flow stations around, we’ve had a situation where we renovated schools for them even though it is the state government’s duty to do that, we also give them some contracts, supply of certain things, like the bush clearing jobs etc. So we have been affecting them positively and that is why they always want us to come back and work with them.
What do you think are the challenges with the local content and which areas do you think there are needs for improvements?
Definitely, there will be a challenge because the IOCs have a lot of huge investments and they will want to have control over companies they want to do the job for them. But the local content law says ‘No, you are not permitted to do that, you know is difficult, so it’s as if we are moving against tide. You know they say they don’t want us to work and we say we must work because we are Nigerians and the work is in Nigeria, the resources being taken away are in Nigeria, you can see is not easy to fight but we have a good force that is making us to overcome, even when they say no, we most work. Another challenge is the different interest of Nigerian laws, you can see local content is driving Nigerian companies to come and work in Nigeria because the oil and gas encouraging entrepreneurship, encouraging Nigerian companies to build capacity, to build human resources, just to be able to withstand the international companies but the tax laws are not also helping us, there are heavy taxes on even the Nigerian companies, it doesn’t help growth in this kind of scenario. If a Nigerian company is employing Nigerians gainfully, improving the economy of Nigeria, there should be a kind of tax reduction to encourage them but is not like that, so I will like the Nigerian government to look at all their policies so that they will have a common target so that they will come up with a common approach, not one working against the other. It is actually difficult but the most important aspect of the job is that of employing Nigerians and letting the revenue from the job remain in Nigeria, that is very important, that is why we are fighting, and fortunately Fenog is at the forefront of this fight and people are coming behind but we are the ones facing the heat directly, it is not actually easy but I know that we will get there by the grace of God.
Where do you intend to go in the next 5-10 years?
In the next 5 – 10 years, we are looking at Fenog being a Nigerian company even greater than the multi-nationals because now we are going into offshore, soon we are going to diversify, and we are looking at that happening in a very short time; we will be an employer of up to 10, 000 workers. We are planning to build a fabrication yard with a dry dock in it that can employ that number of workers, with that, we are fully into offshore business, we are into fabrication already. So we will go higher and hopefully, better than all these international Oil companies, that’s our target.
As a company that won the award and will be handing over to another company this year, what advice do you have for companies aspiring to rise to the level you are right now?
The advice is that they should be resilient, let them keep biting, and let them not get tired because it is a fight for all. One year they will hand it over and give the same advice to their predecessor, so the advice is that they should not relent to ensure that they uphold Nigerian content so that we can keep improving the country, because our hope is that very soon all these international companies won’t have any market in Nigeria anymore, because as Nigerians, we are able, it’s just a matter of trust for Nigerian companies, and on the part of the Nigerian companies, it’s just a matter of being able to deliver.