Long before the local content law was enacted, Kaztec Engineering Ltd., an indigenous company specialising in providing engineering, procurement and construction services to oil and gas companies, opened shop in Nigeria. Seven years down the road, its Executive Chairman, Sir Emeka Offor, in this interview with JULIET ALOHAN, relates the success story, challenges, and vision of the company and said with the rate of advancement in the industry, Nigerians would soon begin to export engineering services to other countries. Excerpts:
Tell us about Kaztec Engineering Ltd.
Kaztec was incorporated in Nigeria in June 2005; it is a subsidiary of Chrome Group. It has performed well over the years satisfying the requirements of its clients. In the second quarter of 2007, it was awarded a 24-inch X 107 kilometer Calabar to Adanga Pipeline Engineering Procurement and Construction (EPC) contract.
Again in the third quarter of 2009, it was awarded the Pipeline Integrity Assessment and Metering Station Rehabilitation and Upgrade/Expansion of Metering Facilities, among others. As a matter of fact, the Pipeline Integrity Assessment and Metering Station Rehabilitation and Upgrade/Expansion of Metering Facilities will be completed by April this year.
As a leading indigenous service provider, what would you consider to be the strongest selling point for Kaztec in the area of engineering procurement and construction (EPC)??
Kaztec has been able to put together a first class procurement and construction organisation. We have procurement offices in Lagos and Dubai. Our procurement staff are highly experienced and are tasked with providing equipment and materials for construction operations, barge supplies for pipe-lay and lifting operations.
We have acquired assets that are fit-for-purpose such as DLB Ekulo Cheyenne with 800-tonnes fixed Manitowoc Crane, capable of meeting a good percentage of lifting needs in the West African sub-region, in addition to pipe lay capability.
We also believe that we have a modest but successful offshore pipe lay and hook-up experience in the last one year.? The company also provides a turn-key EPC capability with emphasis on project management and engineering solutions.
In terms of shareholding structure, management and staff expertise, how Nigerian is Kaztec?
Kaztec is 100 per cent Nigerian owned, its management is also fully Nigerian and in terms of staff expertise, only less than 20 per cent expatriate staff are engaged in the offshore installation jobs. It may interest you to note that all our onshore installation are handled entirely by Nigerians.
Kaztec, like most EPC providers, operates in the Niger Delta where issues of host community agitations have remained intractable. What has been your experience in this regard?
We regard and treat our host communities as partners in progress, and therefore carry them along in whatever projects we are involved in the community. However, community agitation is still prevalent in the Niger Delta region and indeed widespread in certain areas of the region.
To mitigate the adverse effects of community restiveness, we developed a Community Relations Policy aimed at truly treating host communities as key stakeholders and engaging them on a continuous basis. Kaztec entered into Global Memorandum of Understanding (GMoU) with them which are aimed at improving or providing infrastructure, engagement of community members into the workforce and direct financial payments to key community projects or groups.
These are done in addition to contractor’s responsibility to preserve the environment. So far, we have only experienced minor issues with host communities which have all been resolved. We have a full time community relations staff focused on continuous engagement, mediation, prevention and resolution of crises if, and when they occur.
You set out to achieving indigenous participation in the oil and gas sector even before the take-off of the Nigerian Content Act, what propelled the company to follow such path?
We believe that the secret to success in the oil and gas sector is ones’ ability to deliver products in a safe, suitable, cost efficient and timely manner.? We created an indigenous company specialising in oil and gas services in Nigeria at a time when Nigerian Content was in its infancy.
Our vision was to create an indigenous EPC capability, covering both onshore and offshore where few other indigenous companies ventured. This vision I believe is dynamic, and will continue to grow to encompass new capabilities leading the company to become a major player in the West African oil and gas industry.
What are your projections for the future?
Our current capabilities include onshore pipelines and stations, EPCIC and offshore sub-sea pipelines and platforms, but going forward, we will extend these capabilities to larger projects with enhanced EPC capabilities.
We expect to move into deep waters offshore Nigeria and then other West African countries. In addition to these, we will expand into new capabilities covering onshore pipe corrosion and concrete weight coating, onshore platform fabrication as well as onshore supply base. We strongly believe that Nigerians will be exporting technology and services to other African countries and regions, in the near future.
Your company participated at the 2012 Nigeria Oil and Gas (NOG) conference in Abuja and plans to attend the 2012 Offshore Technology Conference in Houston Texas billed for late April, what do you intend to achieve in these exhibitions?
We expect to be able to present concrete proof of our ability to deliver offshore oil and gas projects. We will bring write-ups, pictures, movies and key personnel prepared to share our story with attendees.
We participated in the NOG in Abuja for the first time in 2012 because we have successfully completed projects and sub- projects in recent years and have developed a track record of onshore and offshore construction successes which we believed we needed to share with the industry and also broaden our horizons with new contracts and capabilities going forward.
What would you say are some of the limitations confronting local oil service companies under the current local content regime?
The single largest limitation to many companies is non-availability of funds to remain in business. Despite these obstacles, our company has been able to establish a level of trust with our customers and sub-contractors that allow us to function in a profitable manner.?
Other challenges faced by many oil servicing companies under the local content regime include the necessity to employ local staff in senior positions when there is a dearth of qualified manpower in the Nigerian oil and gas industry that have the requisite expertise and skills set.
This is, however, not unique to Nigeria; it is a common challenge that can be found in many countries around the world. Flexibility in enforcement in the early years and extensive training of staff will enable more people to gain the necessary level of experience and expertise that is needed to sustain effective operations.?
We strongly believe that people are key to developing the vision, and when working effectively in a team-oriented and focused environment, their productivity will be significantly enhanced.
?