Looking beyond oil in Nigeria

To what extent should local companies start looking beyond the oil industry?
Although Nigeria is an oil-producing nation, oil is not our main wealth. This country is essentially an agriculture-based one but this sector has been neglected in favour of crude oil. The oil boom in the 1970s resulted in a total reshuffling of our economic slate. Important divestments from sectors such as agriculture and industry were made and investment was poured into the oil industry. This has made Nigeria an oil-dependent nation with an unstable mono-economy.
Furthermore, oil is an extractive industry but the truth is that we are only just beginning to master it. This means we only do specific activities within the industry. When one looks at the value chain, one sees that it is only now that we are beginning to truly enjoy a greater share of it. In the past, the Chevrons, Shells and ExxonMobils did all the planning and thinking, and brought in all the equipment and experts. All we were expected to do was provide the support services.
This scenario seems to be changing, and local companies like ours are acquiring a stronger position and voice in the market. However, there are plenty of other opportunities and companies should start looking to diversify not only within oil but also beyond it.

In what ways have you decided to delve into the biofuels arena?
The potential for biofuels in Nigeria is huge given the fact that we have vast amounts of land. Three years ago, we decided to explore other activities related to the oil industry that would truly impact our economy. We have been seeking the best way to marry the true wealth of Nigeria, which we believe is agricultural, to the oil and gas industry. As a result, in November 2020 we signed an MoU with NNPC to pursue developments in biofuels following the approval of a public- private partnership proposal. This move will add to the national biofuels programme in Nigeria, which has been moving slowly since the relevant policy was introduced in 2007. This agreement entails a joint venture between Oracle Limited and NNPC. Eventually, we will create an SPV that will be open for other investors to participate in the project. We need a lot of support, so we are talking with prospective partners in China, Israel, Brazil and Thailand.
Locally speaking, we are in partnership with the International Institute of Tropical Agriculture (IITA), a foremost research-based entity which will provide high-yield seedlings to be planted.

What does this new biofuels initiative entail in terms of feedstock and end product?
The possibilities to produce biofuels are vast in Nigeria, starting from sugarcane and cassava. Our intention is to start with a first phase using sugarcane as there is a large demand for byproducts which can serve the alcohol industry, amongst others. Nothing will be wasted so it is a win-win situation for everyone. Ethanol will be a main product we are looking for as NNPC needs to produce cleaner fuel.

What impacts could this biofuels project have?
This programme goes beyond producing a cleaner and more ecologically sound fuel for consumption. What we are attempting to do is to have a favourable impact on the economic environment in Nigeria as a whole. One of the most important aspects of this project is its direct implications for local entities and communities. We expect that the surge of biofuels in this country will trigger a huge employment boom as it has done in other countries such as Indonesia and Brazil.

Oracle’s bread and butter is maintenance and inspection. What recent work have you carried out in this area?
Plenty of facilities and equipment in Nigeria’s oil industry are ageing, which means that inspection and maintenance are required on a regular basis. We are currently executing two major contracts with Shell for the Bonga North project. These essentially involve pipelines, with non-destructive testing, corrosion monitoring and pipeline and valve services where we check for possible leakages. We have been working on these contracts for six months.
Moreover, we are looking at new opportunities from Chevron to harness, as we are one of their preferred contractors in Nigeria. There are immense opportunities in the area of maintenance and inspection of pipes and we will continue to solidify our presence in this area. On a different note, we are considering going into gas production, as in extraction. There are a lot of assets to be acquired but we have to look into this move in more depth.

What similarities do you see between the Nigerian and Angolan industries and what steps have you taken to penetrate the Angolan market?
Our vision is not just limited to Nigeria. We are thinking of expanding into Angola as it shares many similarities with Nigeria. The nexus and synergies between Angola and Nigeria are clear: two well-established oil-producing countries in sub-Saharan Africa with a similar nature in terms of size and longevity. Like Nigeria, Angola has its own market and presents an array of options for Oracle Limited to capitalise on. In a sense, Angola can leverage on the Nigerian experience, and that is our expectation.
We have already started our journey, having made first contact with <a href=’https://theenergyyear.com/companies-institutions/sonangol/’>Sonangol, with whom we had a board meeting to discuss emerging opportunities. In addition to this, we had a facility offer from the African Export-Import Bank in Cairo to develop projects in Angola, which was a financial head start for pursuing our vision there.
However, it has been relatively challenging to incorporate our company there as the processes have been tedious. One has to adapt and truly understand the business environment in Angola before deciding to put boots on the ground.