Local manufacturing for Nigeria’s oil services

Nigeria

Dr. Kayode Thomas, CEO of Bell Oil & Gas, talks to The Energy Year about the advantages of composite pipes over conventional ones, the company’s main expansionist project and the impact of the 2020 marginal field bidding round on business. Bell Oil & Gas is an indigenous oilfield services company based in Nigeria.

What are the main comparative advantages of composite pipes?
Certain players within the industry are starting to recognise the critical advantages of composite pipes over conventional carbon steel ones. For example, the conventional pipes are often stolen because they are easy to dispose of, as the existing illegal market demonstrates. On the other hand, composite pipes are a specialised type of piping, which discourages individuals from stealing them. On top of this, their total lifetime cost is cheaper, they are lightweight, easy to install, corrosion-resistant and eco-friendly.
They are not particularly new within the industry, but it is only a matter of time before many more players realise that this is the way to go. We have invested in them and have the only spooling prefabrication facility in the country as a local company.
Bell Oil & Gas is the only indigenous oil service company with the Category A Nigerian Content Equipment Certificate (NCEC) – the highest category issued by the Nigerian Content Development and Monitoring Board – for fabrication of composite pipes. The Category A certification is reserved for companies that have demonstrated capacity, equipment, personnel and expertise in a particular field or service area.

What are your main contracts for composite pipes?
We produce, supply, install, commission and maintain a range of composite pipes. We are very active on major projects like the Ikike for TotalEnergies, NLNG Train 7, and the Assa North-Ohaji South (ANOH) project with ANOH Gas Processing Company. We fully expect that other projects such as Bonga Southwest/Aparo, whenever it proceeds, will look more closely at the alternatives than was done previously.

Tell us about Bell Oil & Gas’ main expansionist project.
We have spent the entire pandemic period building and developing against all odds, preparing for what we saw as an inevitable upturn. Our idea was to build capacity to guarantee a sustainable future, and capacity can’t be built without heavy investments. Our final goal was to be strategically positioned in a better place in the post-pandemic environment.
This is how we conceived our Project Evolution investment, which is the largest we have made in the industry. It entails the commissioning of a multi-million-dollar, integrated facility, located at the Lekki Free Zone with a total size of over 15,000 square metres. We finalised construction towards the end of 2021. The first phase of this plan comprises state-of-the-art valve assembly, maintenance, testing, painting and production. By the time we complete it, “Made in Nigeria” valves for the oil and gas industry will come out of that plant.
The second phase, which is running in parallel with the first phase, is heavily geared towards piping, pipe threading, machining and production of pup joints, crossovers and accessories. These major investments will enable us to play an active role in other parts of the value chain that we haven’t been able to participate in until now. Construction is completed, and equipment fully set up and installed. We are in the final phase of training and commissioning is imminent.
The facility will also accommodate our composite pipe fabrication services as well as serve as a storage and logistics base for our entire operation.

What have been the main challenges in developing such a project during the pandemic?
The biggest challenge was the funding. We had to find additional investors and convince them that capacity building was the right approach. Once we overcame that, it was about finding the right technical partner because we needed serious international technical partners willing to guide, train and transfer knowledge to our personnel over a defined period. Unfortunately, the pandemic struck before we could start, requiring us to slow down construction in order to comply with Covid regulations. Exchange rate fluctuations have also been a challenge, as investors were sceptical about their returns. Nevertheless, we kept going because we wanted to be there for the industry’s revamp.

How will the 2020 marginal field bid round impact your business?
The Nigerian industry can’t say it has fully developed capacity from a local content point of view without having serious and credible players across the entire value chain. We need to have more indigenous players in the upstream sector, which is why this marginal field round is fascinating. We are an oil service company, and what we provide to IOCs will be required by local players as well. Therefore, we see this as a fantastic opportunity. The more companies that participate within that sector, the more business opportunities there are for us. It is pretty clear that we still have a lot of work to do with regard to approaching those companies and pitching our services, but we know that we have to render the required services.

Where do you see Bell Oil & Gas in the next five years?
Bell Oil & Gas will be more dominant in our service areas, and our project evolution certifies this view. The expected impact of this project is enormous, as we will be able to locally manufacture products that are usually imported.
Bell Oil & Gas is committed to local content development in the industry more than anybody else. That is why our priority is to establish even more within our country. Notwithstanding this, we have a lot of services and value to add to other countries, such as Ghana, Angola, Equatorial Guinea, Gabon, Mozambique and Chad. But we must first have a firmer grasp within the Nigerian oil and gas industry before we venture further out.
On the ESG side, we are pretty confident that we will emerge as a local company that is championing the cause of eco-friendly solutions over the coming years. The next five years will be far more exciting than the first 20 years of Bell Oil & Gas.

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