Oilserv and the Challenge of Building Local Capacity in the Oil and Gas Industry

OilServ Limited in its 20 years foray into the Nigerian oil and gas industry has gone through many challenges in respect of local capacity development. In this write-up, Olusola Bello takes a look at some of the challenges and what it is doing to address them.
OilServ Limited is one of the indigenous oil-servicing companies among the few around that have through its operations demonstrated high capacity and ability that show that Nigerian indigenous companies can prove their mettle in the sector, hitherto dominated by foreign companies.
OilServ is a company that is tailored towards the services of the oil and gas industry as well as exploration and production of oil and gas resources, and has shown more than mere interest in pushing the case of building in-country capacity in the oil and gas industry.
The company is purely an engineering, procurement and construction firm in land, swamp and offshore terrains, which has proved to multinational oil companies that it has the capacity to meet its deadlines and do high quality jobs when given the opportunities in the areas of building pipelines, flow lines and facilities associated with these pipelines; from manifold stations, pigging stations, metering stations, and others.
Twenty years after it started operations, the company can beat its chest about what it has actually been able to achieve in the industry. Going down memory lane of the last 20 years, at the just concluded Offshore Technology Conference, held in Houston, Texas, United State of America, Emeka Okwuosa, chairman, OilServ Limited, said the company was still far away from it set target of developing local capacities in the Nigeria oil and gas sector, saying “if we hear about local content as a law today, some of us may not know that it took us 20 years fighting for this.”
“When we talk about the future of the country, it is not a political statement, we are talking of how we as individual impact on the system to ensure that the extraction of oil and gas in the industry is done in a manner that would retain most of the values in Nigeria.”
The capacity the company has today, he said, could be similar to what Wilbros had when it held sway in oil service industry in the country.
Its capabilities include intricate jobs like river crossing, traversing difficult terrains, making repairs, quick interventions and rehabilitation of major trunk lines.
The company is currently responsible for the construction of half of East-West gas pipeline, OB3 pipeline. The OB3 pipeline is the biggest pipeline project being constructed in Nigeria – a 48-inch pipeline project that is expected to carry gas to various power plants. It has never built a pipeline of such magnitude. This is the first time such pipeline project is being executed. It is called OB3 because it goes from Obiafu-Obrikon in Rivers State to Oben in Edo State. Instead of calling it OB-OB to Oben, they call it OB3.

It has started activities that would lead to the final laying of the pipelines. The contract is called EPC – engineering, procurement, construction. It has finished the engineering and has procured the entire pipes. The pipes started arriving the country since November 2013.
It however encountered some constraints along the line, which have been solved by Nigerian National Petroleum Corporation (NNPC). The major constraint has to do with the pipeline right-of-way. It was in April this year that NNPC secured the entire right of way for a project that was awarded more than a year ago. There are still some gaps, however.
In Nigeria today, the most difficult aspect of the of work the company engaged in is dealing with communities. Ordinarily, there should have been a law in the country that should enable companies to easily acquire the operating pipeline licence (OPL, as it is called). Companies that want to engage in such exercise of construction of pipelines should go to the Department of Petroleum Resources (DPR) and apply, go through the process that involves detailed environmental impact assessment (EIA) and all the requirements before they are giving the licence.
With that licence, it would go into any place that is appropriate or designed for the project and build the pipeline. But it does not work that way in Nigeria. You have to go back and measure the right-of-way meter by meter and start negotiating with individual communities to make sure you have a framework to enable you work. It was only last month that OilServ got that and it has actually commenced work.
“The bottom-line is that building a pipeline is not like going out there to buy a car which you start and ride away. It is a long process. But I believe clearly that now that we have started, within the next 20 months, we should be done with construction, all things being equal. There are other things that could delay but we don’t hope for that,” according to Okwuosa.
Speaking on the strategies to be evolved to ensure that the project is delivered within the 20 months target period, the company chairman said it was difficult to give that assurance but that the good story here was that they, the company workers were experts in what they do. “We have experience that goes beyond discussing the current project. As I speak to you, we have been talking about OB3, but beyond OB3 we are executing 10 other projects. We have a total of 11 projects going on at the same time. And we have been doing this level of activity for a very long time. The 11 projects put together are worth more than $550 million,” he said.
What it shows is that the company has a method of engaging communities that enables it understand the communities, understand their needs and go for a win-win situation, he said, saying you cannot lord it over them. They may appear sometimes unreasonable but one have no choice than to deal with the issues. Dealing with the issues is basically getting to know their structure and the structures are different from community to community. “Discuss with them and agree on what has to be done, which includes provision of job opportunities for them, sub-contract for them, security opportunities for them and being able to do some community development projects for them,” the chairman said further.
To address the issue of lack of capacity in the industry, OilServ in conjunction with Petroleum Technology Association of Nigeria (PETAN), is partnering the universities to develop employable graduates.
To drive home the importance he attach to building capacity, Okwuosa said “OilServ believes in capacity development,” as the programme required going to specific universities in Nigeria and looking at final year students in specific disciplines in engineering, interacting with them and being able to read their mindset and know the ones with possible first-class and second-class upper division that may be adaptable.
At the end of the day, there may be about 20, 30 of such students that meet the conditions for such exercise and, through structured interviews, one-on-one, we would be able to narrow down to about five.
OilServ has a graduate training programme, and about 14 of the current batch commenced work a month ago. But due to the way the national youth service is structured, it can’t take them before youth service because it is compulsory they go for youth service, he explained.
After they finish their youth service they are then made to go for one year training. At the end of the one year, about 60 percent of them may pass through. The company takes those that it needs based on it work needs and certify the rest to go to other companies.
It also has a skills acquisition system where it trains people in skills like welding, fitting, heavy duty equipment operations, and others. This programme has been on for 12 years. It is a yearly thing and it is carried out in conjunction with the communities.
The credit of the achievement of the company, the chairman said, should go to Nigerians because the company through Nigerians is not just doing the challenging jobs but it is also building capacity and training, as all the people working in the company today are Nigerians.
“Some of these individuals left universities in the 1990s and early 2000s, and came in as fresh graduates. Today, some of them are general managers, some managers,” Okwuosa said.