With an investment of over $175 million in its Fabrication Yard in Port Harcourt, Rivers State, indigenous oil & gas servicing company MG Vowgas Limited says its plan to build Nigeria’s first ever modular refinery next year is on course. It’s Group Managing Director/Chief Executive Officer, MR. GODWIN IZOMOR, said before the end of the year, the project’s components will be assembled. In this interview with Assistant Editor CHIKODI OKEREOCHA, he also said the company has concluded agreement with the Research Department of the Federal Ministry of Defense to start building made-in-Nigeria ballistic airboats for use in the country. He, however, said there is need to halt or, at least, reduce capital flight to deepen local content and also remove the power sector from the exclusive list in order to open the sector to investments.
Give us a brief background of MG Vowgas Limited?
The inauguration of a democratic government in Nigeria some years ago has opened more windows of opportunities in the oil & gas sector for serious and committed companies, thereby increasing private sector participation in the economy.
Participation of new entrants, particularly indigenous participation, is being encouraged in order to promote a vibrant economy and a springboard provided for the development of indigenous companies.
This led professionals with extensive experience in Business & Corporate Strategy, Finance, Project Management, Management Consultancy, Supply Chain Management and Engineers to put heads together and create an organisation dedicated to giving the Nigerian oil & gas industry the much needed local participation and increased local content.
This led to the birth of MG Vowgas Limited in 2006. MG Vowgas Limited is a wholly Nigerian company with a total capability across the spectrum of Building, Civil and Mechanical Engineering Works, Manpower Supply, Procurement, Engineering Design, Project Financing, Marine Support Services, Project and Integrity Management.
MG Vowgas Limited aims to be a force and significant player across the entire value chain of the Oil & Gas, Chemical, Petrochemical, Industrial and Construction industry in Africa and beyond.
What is the company’s area of specialty?
We have the capability of handling projects requiring millions of man hours in areas of engineering, global procurement, construction and installation.
Our team of principal participants has successfully completed highly diverse construction projects in various locations in the areas of oil and gas pipeline facilities, design verification and construction as per all mechanical, electrical, civil works, erosion and flood control works etc.
MG Vowgas Limited has a very strong financial base with the capability of mobilizing on any project at short notice. Basically, we are into fabrication and construction. We are an Engineering, Procurement, Construction and Installation (EPCI) company.
Our work cuts across all the areas of oil and gas industries. We are also into marine; we have done various fabrications on marine vessels. By 2020, we are going to build the first Nigeria offshore loading facility in form of Floating Production Storage and Offloading (FPSO).
Also, we are going to build the first ever Nigerian modular refinery here in this Fabrication Yard next year. We are already in a design process and by the grace of God before the end of the year we will assemble the component in this yard.
What’s the worth of this Fabrication Yard?
The Nigerian Content Development and Monitoring Board (NCDMB) categorized us based on what we have spent.
Based on the certificate they issued to us, they under-quoted our worth; they quoted us $125 million, but this facility is worth over $175 million in investment.
How has the journey been?
The journey has not been easy. As at today, we have over 230 staff, but that is a journey of three people today since 2009.
The only thing I can tell you is that what keeps us strong is God. I can say that whatever we have achieved today is not just my effort, but the combined effort of the company’s dedicated staffs especially the technical guys.
I mean those who have supported us and all my staffs that have been faithful even when there is no money; they are still working with us.
MG Vowgas entered into a partnership with Ministry of Defense. What is the partnership about?
Currently, we are working with the Nigeria Defense Research Department, Ministry of Defense, to build the first Nigeria airboat.
The airboat has the capacity, the speed of 100km/h. The airboat is using the propeller, which is equivalent to the one used for airplanes; that is what we are using to power it and it will be powered between now and January.
We expect President Muhammadu Buhari or the Chief of Defense Staff to come and commission it, which will be the first ever ballistic airboat in Nigeria.
Apart from this partnership, what is your company’s short, mid and long term goal?
By God’s grace, in 10 years from now, from what I have outlined, the first thing we are going to do from next year is build the first modular refinery.
That’s one. Second, we are going to invest heavily with our partners in ship building. We have Brass Local Government Area in Bayelsa State, Nigeria, and Bonny, an island town and a Local Government Area in Rivers State in Southern Nigeria. Our partners are considering weather Bonny has the landmass for that investment.
Secondly, Brass has a lot of land for us to play with so, we are going to compare which one is the best for us, because we must do everything as a company to help our country reduce capital flight.
We need to appeal to the Federal Government to put up a policy in this regard. The second challenge we have as a company is sorting for steel we use in fabrication. As at today, every steel we use is imported either from China, Ukraine, Germany, amongst other countries.
We cannot continue on this road as a country; the huge amount of money leaving this country is huge. The amount we use to import steel into Nigeria annually is enough to set up another steel company in Nigeria.
So, we must encourage the Federal Government to ensure that before the next two year, Ajaokuta Steel Company is able to produce heavy sheet plate for in-country fabrication.
The government has made it clear in its move to drive local content in the country, and that is what NCDMB is doing. NCDMB has moved to expand local content to other sectors of the economy, which is a good development, but there is urgent need for the Federal Government to focus on creating enabling environment and allow businesses for business men.
The Federal Government also needs to focus on developing electricity. We are using an alternative power supply of about 6Mw to power this yard and ordinarily it is costing us so much.
If we had a standard power generating system in Nigeria, the money am spending on providing power to run this place would have been part of the money we would have used to create jobs. But we spend it in security and power generation.
How can the Federal Government encourage investors?
There are several ways government can encourage investors to invest in power generation in Nigeria.
Currently, MG Vowgas and Schneider Electric are collaborating to build an Electric House Sub Station, or Power Station, (a prefabricated walk-in modular outdoor enclosure to house a Medium Voltage (MV) and Low Voltage (LV) switchgear as well as auxiliary equipment), to support the power generating sector.
But the Federal Government needs to encourage the private sector to come in and invest in power generation, by creating a soft landing for them.
Power generation is cheaper and affordable when produce locally with indigenous firm. The first thing the government needs to do is to remove power sector from the exclusive list for local companies to invest in; if power is taking out from the exclusive list you will see investors taking over every aspect of the sector.
Nigeria is a large country with huge economy that anybody is ready to invest, and power is one of the key areas which Nigeria has to unlock for investors to come in.
If Nigerian Telecommunications Limited (NITEL) were not unlocked, nobody would have heard about GSM by now. So, we have to break or unlock the power sector for business men to come in and invest.
That is the only way we can achieve power generation in Nigeria that will be enough for everyone. If anybody tells you they have awarded contract for transmission line and power generations in Nigeria and will begin to have constant power supply across the nation in the next 20 years without unlocking the sector, it cannot happen.
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What have been your challenges?
The challenges are so numerous to be listed, that is why (NCDMB) has to work fast so as to categorize MG Vowgas, because you cannot continue to merge us with a company that has no office, no facilities and tell them to quote for us.
That means that they will under quote and we will be going out of business, because we have huge overhead cost. So, one of the challenges we have is that the industry should discourage lowest bidder, instead of capacity to deliver the project.
You are aware that today there is jobs that they give to counseling contractors that they have not been able to deliver in ExxonMobil.
ExxonMobil had to cancel those contracts because those people do not have facilities; they do not have anything, they are just counseling contactors that are registered in Nigerian Petroleum Exchange (NIPEX) and they send them tender bids, and they quote anything they can quote and at the end of the day they cannot deliver such services.
So, we have to tell NAPIMS and the IOC to jettison the lowest bidder idea, because lowest bidder is going to kill local companies, those who are struggling to build facilities like ours.
Lowest bidding will kill them so what we need to do is we have to encourage those who are qualified and have the capacity to deliver the project; this should be the first thing the IOCs should consider. Secondly, there is the challenge of security.
We spend money even going to the location where we work; we spend heavy money on security. Where I am working in Agip, we have two gun boats and 15 personnel.
In Chevron also, we have two gun boats and 15 personnel. So, constantly we are spending and those things are not cheap. We spend huge amount of money. I pay my workers about N53 million monthly, while my expenses for security is almost N50 million monthly.
Can you equate what you have spent to contracts that have been awarded to you by IOCs and other companies?
Basically, we have spent close to $175 million on this facility. One of the key things the IOCs look at is your certification in quality, your certification in Health Safety and Environment (HSE) and this are some of the things we take dearly.
We have ISO 2015, which is quality and only few companies in Nigeria have achieved ISO 2015 base on quality on fabrication, not just quality on anything, but on fabrication.
We have the best quality management system in Nigeria and the only company I can see in fabrication that have quality management system that have just achieve this recently is LADOL.
It is only LADOL that has achieved the ISO 2015 quality management system. Outside that I do not think anybody in fabrication have achieved that.
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