Why have successive Nigerian governments failed to convince the oil majors in implementing Accenture’s game plan for industrialising third world oil producing nations? . A Nigerian indigenous company Arco Group Plc and a gold sponsor of the just concluded 6th edition of the African Petroleum Congress and Exhibition held at the Abuja International Conference Center made the country proud providing the answer while thrilling the audience with its specialised knowledge and track-record of 24 years in the oil and gas service sector Kassim Sumaina reports.
The sixth edition of the African Petroleum Congress and Exhibition held at the Abuja International Conference Center, March 15-17 has come and gone but the memory lingers in the consciousness of Nigerian oil and gas players for many reasons. Organised by the African Petroleum Producers Association (APPA), the Ministry of Petroleum Resources, Nigeria and AME Trade Ltd, UK, the conference kick started with the challenging title: ‘Positioning African Petroleum for global development and value addition.’ It was a bold and ambitious theme, which set the agenda for the Congress, declaring further that APPA member countries have at their disposal all of the natural and human resources to put their countries in the position of boosting their industrial and technological output.
The theme of CAPE VI was anchored “on the development of the hydrocarbon industry in Africa with emphasis on challenges and strategies, legislation and control, promotion of the gas industry, joint development zones, views and investment perspectives amongst many others.” Of course CAPE, the organisers informed its audience, is established as the largest and the most influential oil and gas event in Africa. Among the sponsors were NNPC, Ministry of Petroleum Resources, ExxonMobil, Shell, Oando, Arco Group, Chevron, Sahara, Total, Orlean Invest, Addax Petroleum, Century Group, Tullow, AME Trade et al.
First Nigeria was the host and this pleased the conference participants and stakeholders which included over a dozen oil ministers from the continent, who expressed confidence on Africa’s economic giant in spite of its current travails of decline.
Vice President Yemi Osinbajo had earlier told Congress participants he was glad Nigeria was presiding over the affairs of the Congress and was being chosen to be the host. Nigeria, he said, would continue to discharge her duties as President of the Association.
Nigeria, Africa’s leading oil producer and the host country, was acclaimed for successfully hosting several world class events, such as the World Economic Forum on Africa and as a founding member of APPA, it was, the organisers said, the perfect location for both new and established producers to benefit from the country’s considerable experience in the oil and gas business. Nigeria at the same time was expected to showcase new potential opportunities in its offshore deep water and ultra-deep water sector of the industry.
CAPE VI, the organisers noted, was an opportunity for the operators in the hydrocarbon sector, both established and new to investment in Africa, to understand the political environment and the main issues “by attending the Congress sessions, as well as meeting the African continent’s main political, economic and institutional decision makers.” It was during one such session that a Nigerian indigenous oil company, Arco Group Plc, made the country proud with its presentation by the Group Managing Director, Alfred Okoigun, who unveiled the group’s two ISO Certifications.
Indeed, Arco Group Plc seemed to have captured the essence and spirit of the Congress at the exhibition stand, with the Vice President and Minister of State for Petroleum Ibe Kachikwu, oil ministers who are members of APPA and key players in the sector gracing its exhibition stand. Expectedly, the Vice-President was received by Okoigun who briefly presented to him, Arco’s advent as a service rendering company to the oil majors in the upstream and downstream sectors.
Okoigun told his story, that of a one-man business founded in 1980 and which in 2016 has become a three-subsidiary organisation with Arco Group as the umbrella employing over 400 Nigerian engineers, technicians and other professionals as well as ancillary staff.
The Managing Director of Arco Integrity Solutions Limited, Pius Ajabhu who is the pioneer of the business model told the visitor that the Arco subsidiary has the largest number of radiographic crawlers as a Nigerian company. The company also pioneered the American Welding Society Training that certifies welding inspectors. Applause.
According to Ajabhu, the Arco subsidiary is now carrying out jobs in some West African countries including Ghana, Togo and Bene Republic while eyeing job offers in other African countries. He proudly added: “Our subsidiary is now an international company by virtue of its proven expertise in integrity solutions.”
The Minister of State for Petroleum Resources told the Vice-President during the visit that Arco Group is a company that has maintained its focus on the services it renders in the oil and gas industry over the years.
Among the earliest callers at the Arco Stand was the Secretary to the Federal Government of Nigeria, Babachir David Lawal who recalled having met the founder of Arco in Warri during the formative years of Arco Petrochemical Engineering Company and expressed his delight that the company has recorded marvelous growth over the years.
Then came Okoigun’s presentation on Value Addition through Local Content in the Oil and Gas Industry in Africa on the third day at the Congress. It was an opportunity for him to share his experience of 40 years as a player in the industry. Malaysia, Norway and Brazil, Okoigun educated his audience, were early starters in the implementation of local content development policies in the oil and gas sector, observing that African oil producing nations have not done well here.
Okoigun said right from the inception of oil prospecting and exploitation in Malaysia, the government of that country laid down the time limit for the International Oil Company, IOC that was moving into the country’s oil industry to ensure that Malaysian nationals were trained to take over the duties of the IOC staff. He said that today, Malaysia is an exporter of expertise throughout the length and breadth of the oil industry.
In the case of Norway, he went on, the Norwegian government specifically issued guidelines and conditions such as formation of local companies, collaboration with the local companies by the IOCs and partnership between both sides in research and development. All the measures paid off for Norway’s local content development.
The Arco GMD said that Brazil’s approach was to demand licenses for the local manufacturing of oil and gas equipment and the step taken has rendered a success story.
Okoigun drew the attention of his audience to the five pieces of advice that Accenture, an American consulting firm had given to the IOCs operating in Africa: develop their economies; stimulate industrial development; increase local capacity; build a skilled work force and create a competitive supplier base.
The Arco boss argued that if African oil producers did not issue such injunctions in the past to the IOCs operating in their countries, it has become necessary to do so now. He wondered why India that does not produce oil is a leading country in the manufacturing of oil and gas equipment and a supplier of manpower in the industry to other countries while African oil producers have made very little impact in that direction.
While applauding the Nigerian Oil and Gas Content Development Act of 2010, he called for effective monitoring of the implementation of the law to ensure that it was not rendered toothless while those who should obey the law carry on their business as usual.
The Arco GMD told his audience how his company has been focused on value additions through its subsidiaries, nurturing indigenous talents through incentives and mentoring of identified talents. He mentioned Ajabhu as the pioneer of Arco’s business model, running the subsidiary under him efficiently and productively.
The model creates an opportunity for any Nigerian with entrepreneurial spirit to run any of the companies with logistics support from Arco Group but with equity participation by such Nigerians. By so doing, there is an opportunity for talented Nigerians to prove their mettle at transforming a nascent business to a successful company. Their reward, he explained is in the form of equity participation without bringing any fund into the companies.
Okoigun was applauded by the audience when he announced that 35 new companies have been incorporated by Arco Group and modalities are ongoing to identify Nigerians who can replicate the Pius Ajabhu’s model.
“As further value addition Arco is now in partnership with hi-tech original equipment manufacturers to expand local equipment maintenance base and expertise and such a step will lead to cost reduction,” he said.
Okoigun recommended a speedy establishment of industrial parks in the African oil producing countries to enable them make up for lost time in local content development.
Another testimonial came from the President of the Nigerian Society of Engineering, Engr. Otis Anyaeji after unveiling the ISO Certification of Arco Maintenance and Engineering Limited, AMEL the second subsidiary of Arco Group to be ISO certified.
Anyaeji disclosed he was privileged to be a witness to the founding of Arco Petrochemical Engineering Company Limited by Okoigun in 1980 and had followed the activities of the company until now that it has become Arco Group with three subsidiaries and a force to be reckoned with in Nigeria’s oil and gas industry.