How to establish oil servicing company

Adewale Sanyaolu

Recent report from the National Bureau of Statistics (NBS), that put Nigeria’s unemployment figure at about 16 million remains a worrisome trend for an emerging economy such as ours.

This was as the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, had argued that, the huge unemployment figure of about 16 million from the NBS, which is equal to the total population of three West African countries of Sierra Leone, Togo and Liberia, demands that Nigeria should extend Local Content practice to other critical sectors including; Agriculture, ICT, construction, power and manufacturing in order to tackle the scourge of unemployment in the country.

Similarly, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have equally expressed worry over the rising unemployment and job losses in the oil sector.

‘‘In almost all multinational oil companies in Nigeria, there are no more direct permanent jobs for the middle level to lower level cadre, which has now become a bigger challenge of increased
violent crimes and suicidal migrations.

We demand that the government should make positive change in employment policies and system, especially in the oil and gas industry,’’ they lamented. But those that have either lost their jobs in the oil sector or others looking for fresh opportunities to explore by being entrepreneurs, can consider oil servicing. Most time, when people hear- oil servicing company, their heart skip with fear. They start to imagine how the established names started and how they got the big money they used in starting up the company.

However, the truth is that, it doesn’t really cost much if you know what you are doing, and you are focused, deter- mined and also know the right steps to take.

SAIPEM Contracting Nigeria limited, Expro Group, and a host of others all started somewhere before becoming reputable. You can start your own oil servicing company today and grow it to become a giant company in future to come, so don’t be afraid to start small, just give it a try today and see.

Skills required

Are you an engineering graduate still searching for job or already working? Do you want to own an oil servicing company from scratch? Do you have passion for oil and gas? Do you have passion, skill and talent in technical works? Can you weld perfectly, design good carpentry works, jig fix and render excellent technical support services? Do you have a rare skill in HVAC (Heating Ventilation Air-Conditioning and Cooling)? Can you troubleshoot faulty air-conditioning units, including industrial chillers and heaters? Can you carry out industrial air-conditioning piping and design? Can you design, draw, simulate with Auto-CAD, and autoplant. Can you design industrial pipes and pipeline? Can you paint perfectly with special paints and additives? Can you work on rigs-casing, tool push, and even construct rig frames?

If you can do at least two of the above, and you know a close friend, a course mate, a sibling, relation or neighbor, who can perform any of the aforementioned tasks perfectly, then you are qualified to startup an oil-servicing company.

Value addition

What does oil servicing companies do for oil firms? They construct rigs for them, they design pipes and pipelines, they carry out most of their engineering, technical and construction works, ranging from mechanical, electrical, carpentry, to supplies.

Nigeria is amongst the top oil producing countries in the world today, and yet, we have very few indigenous oil companies locally today. That’s absurd. Nigerians keep clamoring to get employed in top multinational oil and gas companies, forgetting that they can as well startup one and make it a giant company in future to come.

With oil status and one of the giant producers of crude oil, Nigerians are supposed to own a lot of firms rendering services to the oil and gas sector, but the case is different due to the fact that our graduates and youths in general believe only in working in an already established companies to the detriment of Nigeria’s future industrialisation.

Tips for startups

Must you startup a business all alone? Can’t you team up? Why is there partnership? Even with answers to the questions, the challenge that – Nigerians are bad, corrupt, and not trustworthy comes to the fore. But, one should remember that there is a legal approach to incorporating and partnering in business to ensure equity.

Must you do it by way of words? Why not get a professional lawyer to prepare a Deed of Partnership for you and your partners? So many youths wants to startup a business or company today, they have carried out their survey, and the cost of starting up the business stands at say,
$10,000, and currently, they have only $4000, and in the process of trying to get a loan from bank or borrow from family and friends, they get frustrated because they don’t have collateral to secure loan from bank, and their family and friends aren’t taking them serious to lend them money or they might not have, or they might be afraid that he or she won’t pay back after they lend him or her the money, and in the process, their dream of starting up a business or opening up a company dies like that, just before their very own eyes.

Gather your friends or course mates who have good technical skills and talents in the areas I mentioned earlier, discuss with them on starting up an oil servicing company, and hear them out. For instance, if you are able to organise five friends who have skills in-welding and fabrication, carpentry/civil engineering & architecture, AutoCAD/Autoplant/Piping design, and maybe another with a rare skill in HVAC, then one is good to go.

Registration procedure

Form a company name, and get it registered with CAC,
Get a DPR (De- partment of Petroleum Resources) certificate. Statutory fees is between N5,000 and N250,000,
You also need a tax clearance certificate for the year when applying for some contracts and
a Tax Identification Number (TIN),
Value Added Tax (VAT) Certificate- optional for some contacts,
You need a bank statement to secure certain con- tracts with top oil firms,
Get an office or workshop (as the case may be) to enable partners have a place of identification.