Ahead of the curve in NigeriaMarch 25, 2021
Usman Mohammed, CEO of New Energy Services Company (NESSCO), talks to The Energy Year about why the company has strategically focused on crane maintenance for the Nigerian market and how the local EPC sector has navigated the crisis period. NESSCO is a fully indigenous provider of EPC, facility maintenance and upstream oil and gas services.
What is the strategy behind NESSCO’s crane fleet and services?
Since our inception in 2003, we have adapted to the needs and demand of the market and now we are deeply involved in the installation, supply, maintenance and recertification of heavy lifting equipment, mainly offshore cranes. One must understand that a crane is not something that you buy often, as they have a lifespan of 30 or more years – but they do have to be well maintained. That is our area of strength and our expertise in crane and lifting equipment maintenance in Nigeria is unmatched.
We also now offer equipment leasing services of various capacities ranging from 15 tonnes to 45 tonnes and we have access through our partners to provide more specialised types.
Also, we recently acquired a unique type of spider crane, an advanced portable robotic crane which can be used on your platform or restricted space and can be remotely operated. Folded, it occupies just 2 metres of floor space. When operational, it can lift up to 10 tonnes of material at a height of 30 metres. It is fitted with a state-of-the-art safe load indicator which gives the operator feedback on a high-resolution colour LCD screen for safer lifting.
Presently, we have a large market share in the lifting equipment industry in Nigeria due to the specialised nature of our business. We handle more than 40% of ExxonMobil’s platforms and work closely with Addax Petroleum, Total, Saipem and Daewoo, among others.
How involved are you in fabrication for EPC-based offshore activities?
We are engaged in the construction of skids as well as the fabrication of topside modules and offshore pipeline construction. Some of these works we carry out in our 6,000-square-metre workshop in Port Harcourt, which holds state-of-the-art machinery and tools.
We are now aiming to expand our fabrication capacity, so we are looking at new locations. We are planning a novel workshop that will be used for EPC contracts, mainly offshore, and will also be in Port Harcourt. The major IOCs are now divesting and moving into offshore locations, so we are prepared to cater for their needs.
What new inroads are you making in the area of EPC with your newly formed joint venture?
We recently formed an important joint venture called Technomak New Energy Services Limited (TNES) with Technomak, which is an integrated engineering, design, fabrication and installation company based in the UAE, Kuwait and India. In this regard, NESSCO has the majority shareholding. The aim of this venture is to create a full-fledged EPC company that will also look for opportunities in the EPCM sector, in both onshore and offshore activities.
Through this company we have already participated in several tenders for projects with Shell, Chevron and ExxonMobil, so we have a positive outlook for 2021. We are hoping that TNES becomes one of the major EPC companies in Nigeria. To achieve success, we need expertise, top-notch equipment and finance, which the JV provides.
How has the industry and its EPC sector navigated this period of crisis?
What is happening in Nigeria’s oil and gas industry today is a reflection of what is happening all over the world. The majority of the IOCs have joint-venture agreements with NNPC, having invested in projects that are capital intensive. The low oil prices, of course, have greatly affected these activities. Regardless of this, there is still a lot of work to be done in the oil and gas industry and the government is fully committed to this sector, which today is the major pillar sustaining Nigeria’s economy.
In the area of EPC in particular, we have witnessed many projects that have slowed down, stalled or been shelved. However, the fact that we have pushed local content in this country for the last 10 years is helping the sector to be resilient. In this sense, the NCDMB [Nigerian Content Development and Monitoring Board] plays a crucial role in propelling local EPC and fabrication companies forward. Local content has been pivotal to navigating this crisis and will thus be valued even more in the coming years.
What differences do we find between international and local EPC companies?
There is a gap between international and local companies, and this is fundamentally based on capital and longevity. The oil and gas sector is capital-intensive, which means that EPC companies need to have access to large pools of funds to develop the major projects at stake.
Partnerships are a good starting point. This allows indigenous EPC companies to work hand in hand with IOCs, ensuring a transfer of knowledge and technology – essential pieces in the EPC game. This is advancing the local EPC sector.
In what ways are you embracing technology through NESSCO Lab?
Moving forward, we are very eager to grow sustainably through the adoption of new technology. To this end, we have created a division called NESSCO Lab. It is made up of young and dynamic brains who excel in terms of research, business forecasting, planning, information technology and business intelligence.
The aim of this unit is to bring the latest in technology, project delivery, quality of personnel, HSE and beyond. We are using tested and proven technology to expand our capabilities. For example, when it comes to maintaining the cranes, this can be done from any part of the world via technology. We aim to monitor our cranes remotely. We are not waiting for Nigeria to go digital – we are already ahead of the curve.