Indigenous engineers should prove their mettle by taking advantage of FG’s policy in energy sector
By Vincent Ukpong Kalu
Thursday, March 6, 2008

•Seun Faluyi Photo : Sun News Publishing

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Managing Director of Global Oceon Engineers Nigeria Ltd, Seun Faluyi said that there are prospects for indigenous oil and gas companies in the country in view of the encouragement by President Umaru Musa Yar’Adua’s administration to increase local content of engineering in the energy sector to 70 per cent in the next three years.

Faluyi, a mechanical engineer, who has been in the energy industry for over 20 years consulting for NNPC, SPDC and other oil companies took the initiative and challenge of the Federal Government to setup the first indigenous subsea engineering design firm in Nigeria last year. According to him, he brought to bear his over 20 years in the oil and gas industry.

Background
I am a Mechanical Engineer by training. I have been in the oil and gas and energy industry for over 20 years. I have been practicing as a Mechanical Engineer and consulted for NNPC, SPDC. Global Oceon Engineers Nigeria Ltd was set up about a year ago.

About Oceon
Oceon is an indigenous engineering design company in the oil and gas industry. We are in the service industry. We provide services to the oil producers. For example, oil producers need to construct platforms for exploration, development and production or pipelines to connect these platforms. These facilities require service companies like us to do the design, construction and installation of the facilities. We set up primarily to focus on sub sea engineering. The reason is because, since its inception, oil exploration in Nigeria has been mostly on land and shallow waters but it is going deeper and deeper into the sea. The experience of most of the engineering companies we have in Nigeria has been on land and shallow waters. Nigerian sub sea engineering companies have not really been available for oil companies to use. We identified this as a niche in the market where we can focus.

Foreign companies are doing most of the present designs for subsea engineering. The Federal Government has however said engineering must be done in-country by Nigerians and this has challenged Nigeria engineers greatly considering the fact that all over the world, most engineering companies have their activities on land and in shallow waters. To get the kind of expertise required for sub sea engineering is therefore not very easy. It is therefore a major challenge to us Nigerians to demonstrate to the world that we can be competent in this particular area of engineering and compete with engineers from any other country in the world.

Why we went into this new challenging field
It was the encouragement of the Nigerian government that made us to venture into this new field. The Federal Government has a policy to ensure the development of the oil industry by Nigerians. The policy says that national content in the oil and gas industry should be 40 per cent before the end of 2007 and 70 per cent by the end of 2010. We do not have enough people to do the engineering in Nigeria. To achieve what the government is aiming at means that we need to be bold to do our own part. Participating in this industry is capital intensive and intellectually challenging. We took advantage of the Federal Government’s initiative to make a decision to start the company.

In addition, while consulting for the NNPC, we talked a lot about local content and I realized there was a gap in capacity. When you assess Nigeria’s current capacity for local content, you will know there is acute shortage of skilled personnel to fill the gap. That is why we entered into this market with the encouragement by the government initiative. Though it is still a policy, hopefully it will be a law that we should do all our engineering by ourselves.

Challenges
The challenges are enormous. Getting the people that are skilled in engineering design is not an easy task. We have had to interview a lot of people and sort through hundreds of CVs to get the right people who not only have the aptitude for working in engineering design but also have the aptitude for working in a specialized area like sub sea engineering.

Another challenge is making the oil companies aware that we have the competence to handle their jobs. We should get help through the NNPC’s Information Exchange for the Petroleum Industry (NIPEX), which should help to publicise our company. That should raise awareness among oil explorers and producers that we are a credible company.

Another challenge is that because of the restructuring of the industry, there has been a slow down in the approval of new projects. Ordinarily, those new projects that we are looking forward to working on have not been coming as quick and as fast as we initially expected.

Foreign oil companies will not be skeptical about our ability to deliver. We are pragmatic about it. We know international oil companies will be looking for a track record. We have therefore established partnerships and relationships with credible engineering companies like Pegasus International and Acergy. These are global leaders in their areas of expertise - subsea engineering and construction in the oil and gas industry. Because of the Federal Government’s policy that our engineering must be done in-country, these companies have accepted to work with Nigerians. They cannot get jobs on their own in Nigeria unless they work with an indigenous engineering firm.

These companies are well respected by international oil companies. They were also looking for credible Nigerian company to work with. Because we have this partnership relationship, the international oil companies are not just seeing a black face or a Nigerian hand, they will be seeing a black face or hand that has international support. They will not see us as being weak and new, they will see us as one being guarded by these ones who are experts in the field.

We are not just limited to subsea engineering
We have a focus on doing designs for subsea facilities but we are not limited to that. We also do conventional engineering. Our vision is to be the best engineering company in Nigeria in terms of our people, the quality of our output, the solutions we provide on projects and the contribution we are giving to Nigeria and Nigerian engineers. In five years from now, we will see ourselves as the biggest Nigerian engineering firm. Even if you are coming from outside Nigeria, you will be looking at Oceon as one of the biggest. We see ourselves as global player. We are not going to be limited to Nigeria.

There is prospect in oil and gas industry in Nigeria
The Oil and Gas industry in Nigeria has excellent prospects. The high price of oil in the international market is a strong driver. Oil is a resource that is currently bringing significant returns to producing countries and Nigeria is the seventh largest producer of oil in the world. Analysts have also predicted that over the next 20 years, we will spend over $1.3 trillion in the oil industry in Nigeria.

Moving offshore may solve hostilities in the oil communities
Several things are responsible for the movement into deep waters and it is not just community disturbances alone. One is that, because a lot of prospecting has already been done on land, new finds are more readily in the sea. In the last 10 years, there have not been many significant finds on land but when you move off shore, you get big finds. However, because it is expensive to drill in the middle of the ocean, you need specialized companies that can handle those kinds of projects. The second thing, for Nigeria at least, is that the community problems and hostilities may be a factor. However the trend to move offshore has started before the hostilities by the host communities.