Nigerian-made innovationNovember 9, 2022
Eke U. Eke, CEO of SpringRock Group, talks to The Energy Year about the improving market conditions for Nigerian oil and gas production, the group’s production optimisation approach and how it plans to become a one-stop shop for the upstream. SpringRock is a Nigerian energy group with activities in E&P, power and oilfield management services in markets across Africa.
How would you evaluate the current market conditions for Nigerian oil and gas production?
Oil prices have grown significantly and by all estimates, they will float between USD 80 and USD 100 for the foreseeable future unless the world slumps into recession. Usually, prices as high as these are automatically associated with a rush of new activities in the sector to take advantage of the situation. This has not happened now because the world is still in denial about the fact that fossil fuels are still needed and will continue to play a key role in our society for decades to come.
A complete energy transition will require decades, especially because the majority think that oil and gas is exclusively gasoline, and are pushing for EVs [electric vehicles] as a replacement, as being the main solution. However, gasoline represents about 20%-plus of oil and gas consumption, while approximately 80% is in the form of petrochemicals, medical materials and hundreds of other products. These misconceptions are deterring investors from participating in oil and gas activities, which are extremely capital-intensive.
Nevertheless, the recent developments in Ukraine have made the world understand that fossil fuels still play a pivotal role in our daily lives. Europe is looking for alternative gas sources and this will foster developments in the sector. There is also the possibility of renewed crude oil and shale activities in Europe. Meanwhile, Africa should reduce its energy deficiency first by delivering industrialisation while ensuring that its carbon footprint is reduced. We forecast a rise in oil and gas activities by 2023.
How is SpringRock Group positioned in the Nigerian upstream sector?
We provide solutions to upstream operators aimed at improving the overall productivity of their assets. For instance, we have an innovative in-house production optimisation tool called MaxP. We are deploying it with a marginal field operator where we are currently diagnosing the problem in the field and expect to move next to a solution soon. We will then take the field on the new path with the new wells they are going to drill, ensuring that the level of data gathering and analysis to be done is adequate for long-term exploitation.
Our production optimisation tool requires that field optimisation strategies are initiated from the beginning of an asset’s lifecycle by gathering data from the onset and not waiting till when some data can no longer be obtained.
Once the field analysis is done, we determine what the system is supposed to deliver and what it is actually delivering, we then take steps to close the gap. This marginal field is a good pilot for us and we are looking for other interested parties who are struggling to produce optimally from their fields. Being a Nigerian-made technology, it represents the first step towards shifting Africa from a net consumer of innovation to a net provider.
What is your growth strategy?
We are putting together the building blocks to become a one-stop shop for the upstream. The current field testing of MaxP with the marginal field operator is key because it will enable us to scale its utilisation to other players. Nonetheless, our main strategy is to get involved in an OML and transform it into our laboratory to test and demonstrate our technological strengths. It would also give us the opportunity to build an asset with a lower carbon footprint.
We are putting together a partnership with two other partners and we will hopefully be successful in getting into an acreage, enabling us to optimise the field. We also want to focus again on having our training and human talent development programme. We are efficient in what we do because our staff has technical and managerial expertise; they are well-rounded professionals. By putting all these pieces together, we will be capable of dealing with the entire workflow of the oil and gas industry.
How is the company planning to tap into the Nigerian power sector?
We are analysing the prospect of involvement in the renewables domain. We want to bring an innovative approach by sourcing most of the necessary materials needed for equipment in Nigeria without relying on the export market. We’ve already started identifying a team, and we hope to have this new group operational by 2023. A possible approach could be to provide renewable energy solutions for FPSOs.
What is SpringRock Group’s value proposition?
We are the best drilling company in Nigeria in terms of well construction and productivity. All of the wells we’ve drilled have produced better than any well drilled previously in that field. Since inception, our mantra has been excellence, and we kept working hard throughout the years because you need to earn an excellent reputation. We managed to achieve milestones that were never achieved before.
We worked in a field that an IOC had previously used special rigs and vessels to operate. We devised an innovative means to work in that terrain with regular rigs, and we saved them a significant amount of cost. The IOC that operated previously in that field approached us to learn our methodology of operation. We are the only company in Nigeria that has managed to retrieve a surface conductor. While this has been done in the North Sea and Australia previously, we did it for the first time in Nigeria and believe such have not been repeated yet. Our drive to undertake activities that have not been done before and to continuously look at how to improve our operations are the key reasons why SpringRock Group equals excellence.
What is your strategy for welcoming technical and financial partnerships?
By nature, we are extremely open to partnerships. The true value of partnerships is the exchange of information and technology to build together a unique solution for the industry. We want to be part of the solution directly and understand its value, so intimate engagement is key. Naturally, our interests should be aligned with those of a potential partner.
How is SpringRock Group playing in the wider African continent?
We are currently involved in a deepwater project in Ghana with Amni International. The contract involves the construction of two exploration wells. It will follow a one-plus-one scheme where if the first one is promising, we will have the green light to drill a second one. This project is extremely symbolic as it will make us the first African company to drill deepwater exploration wells. Unfortunately, the project has been stalled due to some challenges but we are sure that by 2023 it will kick off once again.
We have registered SpringRock Energy in Uganda, and we are currently gaining an understanding of the environment in order to fully benefit from that market. We are at the last stages of entering into a major collaboration with a training institute in Kenya, which will boost our activities there by 2023. We will develop and deliver human talent, targeting oil and gas and other industries. Lastly, we are in the very early stages of possible involvement in South Sudan. We want to become the pan-African company of choice that brings excellence throughout its operations.