A push for innovation and collaboration in Nigerian logistics Eko Seni EDU

Together with ExxonMobil and some partners, we are discussing a trial for a supply vessel sharing concept.


A push for innovation and collaboration in logistics

July 7, 2022

Seni Edu, managing director of Eko Support Services, talks to The Energy Year about dynamics in Nigeria’s energy industry, the main challenges related to the country’s ports and the company’s key activities and growth strategy. Eko Support Services is a Nigerian-owned logistics company.

How would you evaluate the Nigerian energy industry?
The world is steadily divesting from carbon-intensive activities. IOCs are therefore looking at alternative energy sources to maintain a positive image worldwide. One of the key reasons for divesting is that getting access to funds for oil and gas activities is becoming increasingly difficult because international financial institutions are more concerned with environmental standards.
In Nigeria, many IOCs are starting to divest their onshore and shallow-water assets while keeping their deepwater operations. They have also changed their business model and now prefer farm-in opportunities rather than being exclusively operators. On the bright side, the crude oil price has reached a historic level in 2022, and the PIA [Petroleum Industry Act] has also been launched, representing a milestone for our country. The main challenge here is that we have not been able to fully benefit from the high oil prices due to production being far lower than our capacity.
Most of our critical E&P projects, such as Zabazaba and Bonga South West, have been delayed over time and have obstructed our production capacities. Security issues, infrastructure deficits and other challenges impede our growth, which is why we have not fully developed after the pandemic.

What are Eko Support Services’ main activities?
In 2021, we mainly focused on cementing our oil and gas sector activities. We did cargo for the Dangote fertiliser plant. We streamlined ExxonMobil’s logistics because there has been a spike in supply chain management activities. We became more involved in materials management by deploying innovative technologies to save more time. Together with ExxonMobil and some partners, we are discussing a trial for a supply vessel sharing concept.
The trial will last three months, and it should start in July 2022. If successful in optimising and reducing costs, the IOCs will present it to NAPIMS [National Petroleum Investment Management Services] to be used widely in the industry. With this concept, we plan to optimise the deployment supply of Nigerian-owned vessels. Local vessels are either not working or not utilised, and most of the time, they are financed by bank loans that are difficult to keep up with. Additionally, the IOCs have shifted to call-off contracts, where vessels are called to work on an as-needed basis. This creates more financial uncertainty for the vessel owners.
We plan to solve this problem by offering a sharing platform where the companies share equipment, space and resources. This platform will save costs and time while increasing efficiency and the supply base.

What is the main challenge Nigerian ports are facing?
A key challenge is the poor road networks, particularly the condition of the roads around Apapa contributing to port congestion. At the moment the congestion is less because trade volumes are down in Nigeria for several reasons. Our economic purchasing power is lower because the naira is undergoing a substantial devaluation.
The primary outcome is that we are not fully capable of purchasing raw materials, and manufacturers are struggling to keep up their trade volumes. Once production ramps up, we will need to seriously improve infrastructure, renovate our roads and use multi-modal transport to facilitate the transportation of goods in and out of the ports.

How is Eko Support Services contributing to the decongestion of ports?
We offer alternative feeder services for containers by deploying barges. The main challenge here is the road congestion, which heavily delays the movement of goods across port operations. We had vessels waiting outside for 30-50 days, and this is not sustainable in the long run.
We offer our space as an alternative way of offloading goods without getting lost in the congestion. The African Continental Free Trade Agreement will also hugely boost marine trade, and we want to be ready when that time comes.


What is the comparative advantage of your facility in Lagos?
We have recently launched an ultra-modern facility with the deepest draught in Lagos to better support deepwater projects. Beyond the deeper draught, we also provide more clearance. We can now welcome larger vessels, which is a feature that not many facilities in Nigeria have. When production in oil and gas ramps up, we will be better positioned to welcome these vessels.

How is Eko Support Services contributing to a future with lower carbon emissions?
We have a certificate that documents our reduced carbon emissions, and we are focused on lowering this further. We are looking for cleaner opportunities in the power sector, specifically solar. We see gas as a growing market, and we will try to get involved in it for our internal use.
International shipping standards have set tighter restrictions regarding off-spec fuel for vessels. We respect these regulations, and therefore we attract compliant vessels, which contributes to higher compliance with environmental standards.

What is Eko Support Services’ growth strategy?
The only way we can grow is by increasing our services outside the ports. We plan to provide a more comprehensive service by expanding to project management, where we will manage projects and materials from their origin to the final destination. We have also been invited to support port development projects in other West African countries, such as Senegal and Equatorial Guinea.
The utilisation of free zones needs to be improved, and we are working on combining the port logistics with the benefits of a free zone to add value. Regarding asset expansion, we plan to develop a warehouse in the free zone to create a production and distribution centre for the oil and gas industry.

How are marine companies collaborating in Nigeria?
We don’t have a great sense of collaboration in Nigeria because we’re still recovering from the pandemic. There has been collaboration by necessity but not in an organised manner. If we consider shipping lines, they are moving down the supply chain on top of shipping services. They have subsidiaries doing the freight forwarding, transportation and off-dock terminals. They are centralising all these activities, enabling them to add value to their customers in their operations and becoming stronger and stronger.
In this case, there is collaboration only because they need to partner with a local player through JVs, but co-operation between Nigerian stakeholders is still scarce.

What are the expected impacts of the Lekki Deep Sea Port on the Nigerian energy industry?
The main challenge in Nigeria has consistently been a lack of capacity; therefore, an additional port is the right way forward. We expect a higher degree of collaboration in terms of cargo movement from the Apapa ports to the new Lekki one and vice versa. Most of the terminals are here in Apapa; this area will still need cargo exchange. Once the cargo volumes increase, the Lekki Deep Sea Port will contribute to higher efficiency in cargo movements.

Read our latest insights on: