Jadesimi: We Achieve 50% Cost Savings in Deep Offshore Logistics

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INTERVIEW

The Executive Director, Business Development of Lagos Deep Offshore Logistics Base (LADOL), Mr. Jide Jadesimi spoke to Ejiofor Alike on the challenges of deep offshore logistics projects and the operations of LADOL Integrated Logistics Enterprise (LILE), a business unit of LADOL. Excerpts:

What is the motive behind the creation of LILE?

The concept and investment in LADOL started as far back as 2001 when the developers were researching the most efficient operating model for a logistics base in the world. LADOL being an integrated support base, means having the full range of services that our clients need for their production and drilling programs, thus optimising on efficiencies to deliver cost savings to our clients.

LILE was the bedrock of the business and everything else has been built on top of that as we develop the LADOL industrial Free Zone and diversify to support other sectors in heavy industries, maritime, agribusiness and high value inputs such and technology being done cost efficiently, safely and reliably in Nigeria and creating a positive global perception of our country, thereby attracting hundreds of millions of dollars of private investment which will be invested across the country creating hundreds of thousands of jobs and driving up our GDP.

 

Could you please walk us through its operations?

LILE which is LADOL Integrated Logistics Enterprise has been in operation from the inception of the LADOL Industrial Free Zone and it centers on drilling, production support services, logistics, fabrication, vessel repair and maintenance capabilities of LADOL. We have executed some of the biggest jack-up rig repairs and maintenance projects in the history of Nigeria for companies like Noble Drilling. During the six-month project LILE provided the bulk of the 370 multidiscipline workforces, accommodation and logistics support. Lead by Noble’s team LILE’s skilled welders, fitters, electricians and scaffolders worked in teams around the clock ensuring the fastest possible turnaround.

When Noble decided to change the original scope of work – as the company decided to carry out additional repair works after initial kick-off – LILE accommodated these wishes without a glitch. In total over 450 tons of steel were replaced during the six-month timeline. LILE managed to complete the project within agreed timeframes and within budget.

By partnering with LILE, Noble managed to save drastically on the project. Not only did the company reduce its transportation costs, it also managed to shorten the time the rig was out of operation. Instead of towing the rig to a wharf in South Africa or Tenerife, due to the capabilities of LADOL Noble chose LILE as a local partner to do the work in Nigeria.

Basically, LILE is a fully integrated offshore drilling, production, logistics support and vessel repairs and maintenance company. Its streamlined business model is based on years of operating the best practices of leading international offshore support bases. The LADOL Free Zone has robust and technologically advanced infrastructure that can operate safely and efficiently 24 / 7 to support high value industrial projects.

Few days ago, we had the arrival of a jack up rig from Shelf Drilling called the Adriatic 1 which will be alongside The LADOL quayside for around three months while work is ongoing. A second rig the Trident 8 will be arriving at the LADOL Free Zone this week from the same company. The rig will require a lot of maintenance and repair work, including changing one of the deck cranes; we will be providing manpower, scaffolding, blasting and painting services

This is an extremely important business unit for LADOL, LILE is responsible for all logistics services, moving cargo, personnel, materials and OCTG equipment for our clients. We provide all requirements including warehouse and workshop space, offices, accommodation, meals, utilities, etc. for the vast majority of service partners. Indoor and outdoor inventory management services, storage and maintenance. Storing equipment and materials in specialised areas as per requirement by our clients, these can be heavy load bearing lay down or temperature and humidity-controlled conditions.

A good example of the sort of equipment LILE stores for clients are the three Total subsea reels weighing over 300 tons each for the Egina project, which are currently being stored at the LADOL quayside. We also do RFI-D tagging and bar coding which allows our clients to track their equipment and goods directly from their factories whether they are in Asia or Europe all the way to LADOL where we have specialised racking and shelving to warehouse their equipment. LADOL runs a streamlined fully integrated logistics service, minimising set-up cost for service providers, maximising reliability and quality control and thereby we have built a platform for full service support for the oil and gas industry.

All these factors equate to cost savings for the oil and gas industry, and for our clients by maximising on the efficiency of our operations to deliver 50% cost savings.

This is what LILE does and LILE will continue to expand as we sign up more. It is really the heart of the business.

 

Having more rigs and vessels come to LADOL quayside; what are the implications for the oil and gas industry?

The indices are good for the economy and specifically for the oil and gas industry. It indicates that there is lot more confidence slowly coming back into the market. The two rigs that we’ve got from Port Harcourt are coming in for maintenance and repair works. So typically rig operators do turn around maintenance before an upswing in the market. We see a lot of these requests coming in from rig owners and it is a positive indicator for the industry which coincides with the stablisation of oil prices in the international market over the past few months. Oil has remained between $60 and $70 per barrels and the positive effect is trickling down making for more confidence for a lot of the subcontractors and operators in the industry. We now need more of the offshore projects that have been in the planning phase for some time Like Bonga SW, Zabazaba, Nsiko, Owowo amongst others to reach final investment decisions (FID). This will ensure stability and growth in employment, human capital development to keep yards across Nigeria busy and inflow millions of dollars of investment into the country.

 

How do you intend to achieve 50% cost saving?

If you look at some of the most efficient oil and gas local content driven countries in world like brazil, fully integrated onshore support bases have been prevalent in the market for over 20 years. The unfortunate situation in Nigeria is that we lack local capacity. The Nigerian market has been kept artificially expensive due to the presence of a monopoly in the oil and gas logistics market there was no level playing field and a lack of competitiveness. This was because a few people, who were not indigenous Nigerians, were ripping off the country while preventing Nigeria from industrialising by stifling modern industrial and maritime facilities like LADOL being built.

The way that LADOL is delivering significant cost savings to our clients is by tailoring our pricing to our client requirements, this means that we don’t have a standard off the shelf pricing model. Instead we have a model that is tailored specifically to the requirements of each client. If you add that to the efficiency with which we operate in a fully integrated world class onshore base facility which hasn’t been present in the market before LADOL was established, that is why it is a new model for doing business which is new for Nigeria but not new for the rest of the world.

 

How many enterprises do you currently have?

We have over 30 enterprises currently registered in the LADOL Industrial Free Zone not just in oil and gas industry but there are host of subcontractors that are also registered in the Free Zone. We don’t only have International oil and gas companies as our clients, there are also a lot of independent Nigerian oil companies for whom we provide services. A good example is in 2016 when LADOL provided the installation onshore support services for the FolawiyoAje (FASL) project. Aje is a field 24 kilometres offshore Lagos in block (OML) 113 and all the installation support was provided by LILE for the Front Puffin FPSO with has a storage capacity