Ewanehi: Local Content is About Competence, Not Patronage

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The Managing Director and Group Chief Executive Officer of Solewant Group, Mr. Solomon Ewanehi spoke to journalists on the impact of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 on local companies. Ejiofor Alike presents the excerpts:

In what ways have federal government’s policies helped in the growth of your business?
As a member of Petroleum Association of Nigeria (PETAN), Solewant is grateful to the federal government in a number of policies and these policies have helped in the growth of our company. Let me take us back a little; the Nigerian line pipes manufacturing and milling market is evolving at the back of the need for the provision of constant supplies to the oil and gas industry.

For several years, the large supply/service companies have opted to procure these line pipes from mills around Europe and Asia without the thoughts of establishing factories or manufacturing plants and research and development (R&D) centres locally such that the bulk of the billions of dollars expended in the industry yearly rarely manifests in our economy. In order to reverse this trend and build local capacity, the federal government passed into law the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, which was aimed at ensuring increase in the amount and value of local content input in the oil and gas value chain.

The objective of this was to build capacity and retain a good portion of the annual oil and gas spend in-country by enhancing and promoting the development of local content in Nigeria’s oil and gas industry. The ultimate goal is to have companies in Nigeria, which possess capabilities that are highly valued and demanded by oil and gas companies operating on the world scene. Since the passage of the law and the establishment of the Nigerian Content Development and Monitoring Board (NCDMB), there has been a significant increase in the volume and value of local company’s participation in the oil and gas industry projects and contracts.

But with still very few (in fact too few) pipe milling companies in the country, Solewant Nigeria Limited after commissioning of the multilayer pipe coating plant, pipe coating laboratory and CWC plant, we are now investing in longitudinal-submerged arc-welded (LSAW) pipe milling plant, also situated in our industrial area, Eleme-Onne, Rivers States, the hub of the oil and gas activities in Nigeria.

In specific terms, how has the NOGICD Act assisted local companies, particularly your business?
As a result of the activities of our association- the Petroleum Technology Association of Nigeria (PETAN), as well as other indigenous bodies, the federal government gave approval to the NOGICD Act of 2010, which is also known as the Nigerian Content Act. In PETAN, we talk about competence, technology know-how and not patronage. If you look at Solewant Group’s past track records, you will see that we have executed and delivered world class pipes/pipe coating projects for MObil, Chevron, NGPTC, Oando, Addax, Total and to mention but a few. And as an indigenous business organisation, the policy has helped us in a number of international partnerships, collaborations, increased local and international raw material sourcing, increased projects opportunities and also increased local technological development. And beyond these benefits, we expect to see sustained improvements in local content over the coming years.

Could you please tell us more about Solewant’s steel pipe manufacturing and pipe coating plants?
Let me start by telling you what we do as an organisation. Solewant was established 18 years ago and we provide steel pipes and pipe coating services to oil and gas industries. Our business is built on expert knowledge, outstanding client service and the highest quality work for each client that we serve. We started with the acquisition of mobile coating plants and have since expanded our scope of services and competencies to include the following: pipe coating services; anti-corrosion pipe coating services, 3LPP to 5LPP coating solutions and CWC Pipe Coating Services.In order to further build capacity and take opportunity of the existing gap in the Nigeria line pipes milling and production industry, Solewant Group, in 2013 acquired 139,000square metres of land for the purpose of building a world class pipe coating and pipe milling/production plantfacilities in Nigeria. Our strategic plan is to provide end to end pipeline (manufacturing, coating and protection) construction services to the oil, gas, manufacturing, chemical and other industries in Nigeria.

How are these pipe coating and pipe milling plants relevant to the Nigeria’s oil and gas industry?
Steel pipe is an integral part of each process stage in the oil and gas industry, from drilling and completion of exploration and production wells, to transportation to refineries, as well as in distribution networks carrying hydrocarbon fluids and natural gas. So, we provide and protect these pipes used for transportationof these fluid. The anti-corrosion coating and mechanical protection of pipelines are very crucial to asset value addition for oil and gas facilities.

What impact has your products made in the sector?
We use oil and gas products every day in Nigeria and pipelines are the safest way to deliver these products from source to point of need. Quite frankly, we rely on oil and gas products to meet most of our daily energy needs along the oil and gas value chains. So, our pipe production and pipeline protection solutions that we offer for oil and gas onshore and offshore project execution assists in, increase-in country capacity in line with the objectives of NCDMB,enables project owners to save time and minimise costs due to quick turnaround and delivery time, employment generation and foreign exchange conservation.

In what ways are your products better than other pipes in the sector?
We all know that successful oil and gas product management depends on identifying the need and wants of the international oil companies (IOCs) and other project owners. Presently, some upcoming onshore and deep offshore projects require high tech products and services because of the nature of the terrain where these pipeline facilities are being installed. So, we offer very reliable and efficient solutions in a way that is ‘better’ than competitive offering.

Solewant Group is strategically positioned to provide oil and gas companies the unique pipes and pipe coating solutions that help our clients deliver quality projects on schedule and within budgets. For instance, apart from our state-of-the-art pipe coating laboratory located at our industrial area, our multilayer pipe coating plant is designed and produced to provide pipe double joint coating solution for deep offshore, First class EU-manufactured plant equipment.

You will agree with me that we have suffered from inadequate local capacity in the oil and gas industry, particularly in the areas of in-country value addition to and production of oil and gas tubular goods. To address this gap, the Nigerian Content and Monitoring Board (NCMDB) was set up to drive local content and provide direct impetus to the existing oil and gas laws and regulations that support local content development. Our industrial area also provides a strong African presence, as Nigeria is at the fore front of the West African development where major oil and gas facilities are being installed.