Can you give a brief profile of Marine Platform?

IT was in 2002 that the Marine Platform story crystalized with two of my friends and myself coming together but the company was actually incorporated in 2001. When we started in 2002, we were very clear about what we wanted to do. It was during this time that cogent steps were taken to deregulate the downstream sector by the government which propelled a lot of indigenous entrepreneurs moving into the sector because it brought a lot of opportunities especially quick return on investment was almost guaranteed. Interestingly, for us, we decided not to move with the tide.

Our reason was anchored on the fact that the sector will not be sustainable in the long-term, especially because it was a new trend in town. We then decided to go into an area that was difficult and did not have many players. The entry barrier is high and competition would be discouraged because of the high risk and massive resources needed. We then looked at the upstream stage and identified drilling support, subsea services and vessels.

I must say here that sub-sea services which is at the core of our business was what actually instigated the acquisition of vessels. At the time, we needed the vessels to launch our subsea services. When we started we had to rely on renting vessels and subsea equipment for our operations. We then said to ourselves that we needed to learn the ropes because subsea equipment such as Remotely Operated Vehicles (ROV) which are robots that are launched into the deepwater from vessels.

As we all know that human beings cannot go beyond between 200 and 250 meters due to pressure. In shallow waters, divers could be used to do the job but in deep waters, special robots, ROVs are needed for the jobs such as opening and closing of valves, cutting of wires etc. At the moment, Marine Platforms has 14 of those robots. Because we operate on top of deep waters, these robots need to be deployed on a pedestal such as rig which is owned by drilling companies or from a vessel that is either owned by the company deploying the robot or chartered from a third party.

When we started, we often chartered the vessels we were using to deploy our subsea equipment. Then we found ourselves in serious operational constraints. We find that our clients – the International Oil Companies

(IOCs) – needed a lot of flexibility in terms of location of operation. The owners of vessels we were chattering at the time decided not to allow their vessels go to some places due to perceived security and community issues. This was a serious hindrance to our flexibility and our business delivery.

It was at this point that we decided to take control of our operation end-to-end. In order to give our client the flexibility they need, we needed to get our own vessels. This step is a very expensive one but very necessary for us as a company going forward. We were never in doubt that our continued existence depends so much on how much we were able to satisfy the needs of our customers. It was a tough decision because the kind of ship that is deployed for this kind of operation costs between 100 and 130 million dollars. We went to acquire the first one named “The African Vision”. I must add that in our business model, we have never declared dividends meaning that we have been ploughing back our entire profit into the business for expansion. Because our bank, Skye Bank Plc understands our business very well and the terrain we are operating in, they supported us to acquire the second ship named “The African Inspiration”, which arrived three weeks ago.

How would you describe the operational environment in the Niger Delta now compared to what it used to be?

Interestingly, the problem we used to confront in the Niger Delta has reduced dramatically all thanks to the various programmes that the government has been executing. The Niger Delta is in our country and we know our country better and if we do not do it, no one will do it for us. At any rate, there is no part of the world that risk elements do not exist. In certain parts of New York, people cannot move round freely in the evenings; it seems London is safe but there are still some areas that are no-go at odd hours.

We understand Niger Delta and know the risks that prevail there. The IOCs have done very well in how they conduct the movement of vessels going offshore. For example, there is industry collaboration, which sees most of the vessels going to the field all going in a convoy led by Naval gunboat in front and another behind. That arrangement is very comforting for us. Of course, we as a company have all the insurance policies in place. Chevron have come up with a fuel monitoring system because while some of these attacks are by pirates, I must say that one of the critical reasons why we keep having these attacks is because most of them are actually masterminded internally by the crew.

We have seen instances where crew move vessels near shore in an effort to sell part of their diesel. This act easily result in pirate attacks. We have also seen instances of stage-managed kidnappings for ransom. What Chevron did was novel and Marine Platform have decided to embrace the system. What it does is monitoring the level fuel of every vessel and track the movement on-line, real time. This ensures that the captain cannot go off the route without being noticed and fuel levels are monitored from the offices. Again, another sharp practice, which we have noticed is when vessels are offshore captains turn off their engine and drift for a while and keep computing those moment they were drifting and then sell the fuel they have saved while drifting. These are practices that we have discovered and together with the IOCs, we have been able to minimize most of the sharp practices.

What are the advantages the passage of the Nigeria Content Development law has brought to the indigenous operators in the oil and gas sector?

That law is one of the best things that have happened to our country Nigeria. In fact, that law ought to have been passed years ago. That singular presidential signature has opened windows of opportunities to many Nigerains. I will describe the law as a silent revolution in our industry that has not been sufficiently celebrated. Prior to signing it into law, things were done on moral grounds. The IOCs were doing the right things such as sinking boreholes, building schools and employing locals. They were not government but were doing those things as part of their corporate social responsibility. We must also appreciate that these companies were profit-centric and global in outlook. They were also working with contractors that were equally global. It was easier for the IOCs to just bundle services together and hand them over to the international service companies that are operating on the same global stage as them without query from any quarter.

Prior to the law, it did not make sense not to be doing what they were doing. But in trying to put human to face to it, they were just helping us. However, with the coming of the law and because they are corporate governance driven, IOCs will not want to fall on the wrong side of the law. Today, on the NIPEX, thousands and thousands of companies have been registered. Those entrepreneurs – small, medium, big – would have been on the unemployment market but for the existence of the law. At least now, there are opportunities to go after the jobs. The money is going round because more people are engaged.

Before 2010, there were about 280 vessels working in Nigeria and less than 20 of those vessels are owned by Nigerians. That is average of less than 10% ownership. Today, the situation has changed. We now have about 25% ownership. Some of us are operating on the high end. For example, the African Inspiration will buy about four Platform Supply Vessels (PSVs). What that means is that local operators are now acquiring assets in the very high-end spectrum of the vessel sub-sector. We must not also lose the complimentary role the Cabotage law is adding to the Nigerian Content Law. The Nigerian Content law has actually enabled two laws role into one. The two laws have made it possible for Nigerian owned vessels to have the right of first refusal. The Cabotage law is actually working better in the oil and gas sector and we are hopeful that very soon this effect will move to other segments of the maritime sector.

What does the future holds for indigenous operators in the oil and gas sector especially with the Nigerian content law as the driving force?
Interestingly, I think achievements of the Nigerian Content law are irreversible. Therefore, we will be moving forward as the years pass by. All the stakeholders have accepted the coming of the law especially the IOCs. The most difficult task was acceptance and that has been achieved. We have seen genuine collaborations with indigenous companies with a view to making them stronger and give them a very loud voice in the industry. Most importantly, we are seeing inter-ministerial convergence of purpose.

So, what does the future hold?

We should now consciously begin to look at how we can tap into other important areas of the oil and gas industry to galvanize other sector of the economy such as development of fabrication sub-sector, support companies who in time can service other segments of the economy. For example, fabrication companies can equally go into agricultural sector, equipment manufacturing. Through this, the diversification of the economy we are yearning for can begin to crystalize from the oil and gas sector. Again, in the maritime sector, owners of
vessels can go into fishing, cargo, container, among others, which are presently dominated by foreign owned vessels. Finally and perhaps most importantly, we must appreciate that we can only swim in the pond we have created and because there are many fishes in the pond, the pond is getting smaller. It is therefore important to expand the pond so that we can truly develop the potentials and create employment opportunities.

How do you mean by the pond?

It is the oil and gas industry and expanding that pond is what the Petroleum Industry Bill (PIB) is meant to do. Which then means that we must create that legal framework and remove the uncertainty that is responsible for holding back investment in the industry. By passing the bill, we will then create that legal framework, the fiscal policies will be favourable and we can then see the pond enlarging where IOCs, local operators will really invest and create massive job opportunities for Nigerians, value will be added and multiplier effects will abound. I have no doubt that the future is very bright and the level of that brightness is in the hands of the National Assembly whose jobs it is to pass the PIB. If per chance this National Assembly does not pass the bill, I think it is very critical that the next Assembly prioritizes the bill and pass it in record time for the collective survival of the Nigerian nation.