For oil service industry, these are not the best of times. The falling oil prices are doing harm to business. But Solewant Group, Pipe/Metals Coating Company Managing Director/Chief Executive Officer Mr. Solomon Ewanehi says there is a good side to it all. In this interview with EMEKA UGWUANYI, he calls on the government to provide an enabling environment for business to thrive. According to him, the enactment of the Nigerian Content Act has curbed capital flight, boosted indigenous capacity and job creation.
How would you rate the oil service companies?
Their services are okay. You must provide an effective and efficient service to the oil and gas companies to enable you stay afloat within the industry.
To what extent has the Nigerian Content Act helped the service sector?
When you talk about the Nigerian Content Act, and before the Act, you will discover that these are two areas. Before the Act, we were operating in the industry, and nothing was coming in from the Nigerian Content policy but when the Act was put in place in 2010, it meant people would work within the confines of the industry and that shows there is a law, there is something that would hold people liable if they run foul of what the law says in the industry. In a nutshell, it has helped to checkmate people doing what is required of them within the industry and ensured the standard required within the industry is adhered to.
Has the Act improved the volume of jobs indigenous service companies get?
This one is not personal, it has to do with Solewant as an organisation and it has to do with the entire industry. The Act has to do with the following questions: is the industry now employing more Nigerians that don’t have jobs? Is there capacity that was tapped before that is being tapped into now? Do we now offer services that we were not offering before or we don’t look into? Yes, we are offering a lot of jobs to Nigerians that we were not giving them before. We are also helping to reduce the capital flight because most of our activities and services are being domesticated in Nigeria. Things that we normally import full blown; we can now import them in parts like our hysteron plate, we get and give them partial finishing in-country. On our production of pipe-coating, the pipes were being imported before but production of the polyethylene on the pipe is done in-country now, the production of the epoxy and anexy is done in-country now. Polypropylene is not done in-country before but right now it is being done, these are being done by Nigerians and with equipment we have in-country. What we are saying is that definitely the Nigerian Content Act has helped to enhance and increase the services that Nigerian companies offer. The Nigerian content programme has really reduced capital flight because most of the jobs are being done in-country.
Has the drop in oil price affected your operation or the volume of jobs you do?
I will say yes and no. Yes, in the understanding that the rate at which the industry leaders (the IOCs) were doing more business with us before has reduced. It is not as it was not before, but also no in the understanding that you must protect your facilities not minding whether there is oil price drop or not because definitely you must transport your services from one location to the other. In doing that, you will discover that we are in one way or the other doing much business even when the oil price has dropped because you must protect the pipes. And that has nothing to do with the fact that the pipe that you are protecting will not transport the gas, or the crude. So, the oil price drop is affecting the crude pipes but the gas as it were, a lot of gas pipelines that we have been coating in the past eight months are still the pipes we are coating right now with just few crude lines as part of what we are providing service for.
What is the major challenge of the oil service industry?
There is no how challenge shall cease to exist. When we execute projects, we do encounter challenges. Challenge on the understanding that it is not easy for you to go into project and come out the way you went into the project because you always have on two hiccups, which is why we provide that type of training. Challenges could come in the area of financing, maybe high cost accessing funds. There is a challenge that has to do with the enabling environment. The government needs to encourage us by ensuring that the right enabling environment to do business is in place. The difference between Solewant and other companies that operate in the country is that the problems are there but we always come out of them by ensuring that we execute the projects the way they should be and hand them over to the clients successfully.
How can insecurity and militancy in the Niger Delta be addressed to make the oil industry operate seamlessly?
Although I don’t work on pipelines that are prone to security issues and attacks but within our space, we have factory where we secure the line pipe that we have coated for clients. With that, you will discover that we offer that type of service for the client that we work for, and ensuring that what we have are properly protected for the clients to come and pick up their pipes.
How do you cope with the protection of your facilities and those of your clients, especially in the area of vandalism?
We don’t have security issues in that line because our service is just within our factory. In our factory, clients accept to bring in pipes; we coat them, and they take their pipes back to their right of way but in any case, we have in-house security that provides security to protect the clients’ infrastructure.
Do you have challenge in terms of access to finance?
No.
So you have all the finance you need from Nigerian banks?
There is no way you can have all the finance you need because finance is a core resource and if we are talking of resources they are always limited and not in abundance. But within the limit of our operation, that is what we have now, we do have what it takes to run the industry. We have what it takes to take the industry to the next level. We have what it takes to service the industry and ensure that we are providing adequate service to the oil and gas industry.
What contributions do your foreign technical partners make to the operation?
The technical partners that we have are the partners that we discuss with to have an enabling advantage in the area of know-how because we need to continuously discuss with the partners and also know the new technology and materials that are coming into the industry. For instance, we are having a relationship with Kema Coatings of Canada, Canusa CPS of United Kingdom (UK). We are also having partnership representation of Raychem RPG of India. We have an understanding and relationship with XYT Steel Pipe of China – producer and manufacturer of line pipes from China. So, by and large, the industry is a team and group work activity-based area; so, it is not an individualistic area. So, within the country we have own strength and we also try to seek some strength from other parts of the world. That is why you see that in Houston, United States, we have an office there. I will also mention to you that Solewant is internationally recognised by the regulators of the industry – the National Association of Corrosion Engineering, gave Solewant its gold membership certification. We are also ISO certified by Ocean Certification. We are also a member of British Safety Council and when you look at this, you will discover that for those who are in the industry, they understand that for you to be a world-class oil and gas company, you require these certifications, and if you have these certifications, you will be able to provide quality service that the industry requires of you.
Do the partners have direct contributions in your daily activities or in training only?
Solewant is 100 per cent Nigerian company. They do not have shareholding in Solewant but when you talk about materials, training, equipment, these are the areas they come in because we need tested and proven materials to do our work. We also require tested proven equipment to do our work. By and large these are the areas where we have strength.
The major challenge indigenous firms have is access to funds, how do you source your funds?
In the industry you need to partner with other organisations. We also have financial partners who we do business with. When we go into business and we discover that there is need for us to do the business together, we work together and they also do business with us. Within the Nigerian space, we have financial partners, which we do business with, especially equipment financing partners.
How do you build capacity?
We train our personnel across board. We train them abroad and at home. For instance, our members of staff who work in Houston, Texas, United States, are resident there. Of course they will not come to Nigeria to receive training. Those in Nigeria equally receive training in Nigeria. But when have projects that need to be carried out within Nigeria, for instance, we are working on Erha North project for ExxonMobil, the training was done in Lagos before the workers went to site. So we have that type of training. The project we carried out for Total, we did the training in Port Harcourt before we commenced the project. These are areas where we solemnly carry out training.
What is the major challenge facing the oil service industry?
There is no how challenge shall cease to exist. When we execute projects, we do encounter challenges. Challenge on the understanding that it is not easy for you to go into project and come out the way you went into the project because you always have on two hiccups, which is why we provide that type of training. Challenges could come in the area of financing, maybe high cost accessing funds. There is challenge that has to do with an enabling environment. The government needs to encourage us by ensuring that the right enabling environment to do business is in place. The difference between Solewant and other companies that operate in the country is that the problems are there but we always come out of them by ensuring that execute the projects the way they should be and hand them over to the clients successfully.
How can the insecurity and militancy in the Niger Delta be sustainably addressed to make the oil industry operate seamlessly?
Although I don’t work on pipelines that are prone to security issues and attacks, within our space, we have a factory where we secure the pipelines that we have coated for clients. With that you will discover that we offer that type of service for the client that we work for, and ensuring that what we have are properly protected for the clients to come and pick up their pipes.
