Momentum surrounding energy service providers

Nigeria

Laurent Maubre, managing director and CEO of Dorman Long Engineering, talks to The Energy Year about opportunities and challenges for services providers in Nigeria’s energy industry and the company’s long- and short-term expansion plans. Dorman Long Engineering operates three fabrication yards, including one with a hot-dip galvanising zinc plant.

What new opportunities are on the horizon for service providers in the Nigerian energy industry?
We see a strong momentum around raising refining capacities in Nigeria. The number of new projects is growing, such as the greenfield projects in Port Harcourt with the African Refinery and the BUA Group Refinery.
If Nigeria becomes a gas exporter for Europe due to the current geopolitical dynamics, there will be many opportunities in terms of international financing and local services development. It could create pipelines for the operation, construction and maintenance of various assets. We also anticipate demand from marginal field operators in terms of repairs, anti-corrosion services and other services we can provide.
In terms of the energy transition in Nigeria, we are currently providing equipment, maintenance and refurbishment services to power plants. We will do more in this regard in the future. We are building support for new equipment such as solar panels. Although the panels come from China, we can galvanise the steel that makes up their frame.

What main challenges are local services providers currently facing?
The main requirements for the EPC sector are skills, people and capital. It can be challenging to find qualified subcontractors in Nigeria as access to capital is not as readily available for local companies, who must pay higher interest rates. This has had an impact on the training of personnel.
When working with clients, we also negotiate to get paid in advance to secure equipment and begin the project in a cash positive situation. It otherwise becomes difficult to mobilise one’s assets, especially when there is no guarantee of compliance with the contract and little guarantee of getting paid on time.

What kind of projects is Dorman Long Engineering currently working on?
We mostly work on bigger EPC projects. We are agile and able to mobilise our people easily. We also operate the largest West African galvanising plant, which is key for various industry segments. We work with telecoms, power stations and urban infrastructure.
We have a contract with NNPC and Tecnimont for the Port Harcourt refinery under which we provide refurbishment of the assets. Additionally, Shell has been a long standing customer with whom we have a long history of asset maintenance services. We have provided maintenance services and crew for the company’s Bonga FPSO for the past 10 years and are currently waiting to land a new major contract with them.

What is the company doing to increase value in its services and cut down costs for operators?
The question of cost effectiveness is important. We partnered with Rockwell Automation to automate certain large projects. If a client needs to have automation on a platform, we can provide the technological solutions. In the future, we want to be able to integrate the electronic parts and sensors of these technologies into our mechanical engineering abilities.
Some companies are developing technologies to create digital twins of FPSOs and monitor the integrity of equipment through sensors on the vessels. Using this technology, one can have real-time information about potential mechanical issues and send engineers to fix any issues. However, these applications will only be viable in the longer term.

How has the company’s recent partnership with Africa Capitalworks changed its long-term strategy?
Dorman Long has been in operation since 1949 and has always been privately owned – mostly individually. The recently concluded partnership with Africa Capitalworks and the resulting injection of capital into the company will foster new developments, services and products and bolster expansion into other markets. For growth, one requires capital; the deal has given us the ability to see opportunities where others may only see challenges.

What long-term goals does Dorman Long Engineering have?
In the coming years we aim to become a pan-African contractor in Mozambique, Senegal, Ghana and perhaps Côte d’Ivoire. We have the people, connections and already some offices; it is only a question of time. When anticipating the potential pipeline from Nigeria to Europe, it is important to already have a presence in countries connected to the project to land contracts.
While we are, of course, looking to develop ourselves in Nigeria as well, we need to start diversifying towards different segments. We are looking at doing more services for the offshore, power and telecommunication sectors, among others.

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