Silver linings in NigeriaJune 12, 2020
Seni Edu, CEO of Eko Support Services, talks to The Energy Year about the pandemic’s impact on Nigeria’s logistics sector and how the company is adjusting its operations to tackle new challenges. Eko Support Services is a Nigerian-owned logistics company.
How has Nigeria’s logistics sector been affected by the pandemic?
Logistics operations have to continue somehow as many items in Nigeria are import-dependent. Ports have remained open. The logistics of moving personnel has been challenging as most of the public transport network has been shut down. We had to hire buses and adjust shift times to cope.
Regarding port operations, the president issued a directive that any vessel coming into Nigeria’s seaports had to spend 14 days on the water before entering the port. This caused an issue at the beginning, especially for vessels coming from nearby countries only one to three days of sailing away. There was no point in sailing two days and then waiting at anchorage until 14 days since the last port call.
This rule was later adjusted to apply only to vessels coming from European and Asian countries, as that is where the centre of the epidemic was at that time. That adjustment created extra procedures, with port health authorities having to go offshore to test the crew and then quarantine the vessel in case of infection. When China itself locked down, that also affected the importation of many items.
In the oil and gas sector, we have had two projects cancelled. With the dual shock of the oil price crash and the pandemic, even if they had already spent money to mobilise, clients decided to shut down projects. For offshore, most companies continued to work, and it has been challenging to find support services for that – for materials, technicians or spare parts. It also raised costs as you need to take extra precautions and things take a bit longer. All in all, we’ve managed to keep the wheel moving, and now we’re seeing a bit more activity.
Have you faced any challenges regarding your water treatment plant?
The main challenge has been maintenance. Just getting the chlorine or the personnel for this has been difficult. Or if there is any technical problem, even if we can get the technicians, they’ve had issues getting the spare parts that we don’t have in stock, as the supplier is not able to provide them or get them into the country. Some cranes broke down simply because we could not get them repaired for 10 weeks.
Have you been able to utilise this downtime for in-house advancements?
We accelerated the upgrade of our ERP [enterprise resource planning] system. Regarding remote work, for the operational personnel there is no substitution as they have to be there physically. However, for support roles such as documentation, planning and finance, the work can be done electronically. So, this has been more about how we can work remotely and we have found that by working remotely, people make fewer mistakes. With the commute time removed, you can be more productive and relaxed.
Even past this period, we have to continue to adjust the way we work, and allow for more remote work. Now, having the tools, our personnel are able to work that way. They can connect to the main system remotely, so there is no reason for everyone to come in every day. At the same time, we need to make sure our policies are able to cope with that.
What are your expectations regarding indigenous companies utilising your facilities going forward?
We have supported the indigenous E&P companies and EPC contractors and what I see is that IOCs are reducing the number of expats here. I know some expats that have left because of the pandemic might not come back due to the cost-cutting measures. There will be more opportunities for the indigenous companies as IOCs move deeper offshore. There have also been some discoveries offshore Lagos, which is an opportunity for us.
We are trying to create a system that is a bit disruptive to the traditional model, one that is able to deliver more services with less space. We can’t grow without other areas to go into, and that means we need a second location, which has its own challenges regarding logistics and connectivity. So how do we optimise the space we have here?
We’re approaching this by thinking differently. Rather than giving a client X number of square metres, we have them give us as much data as possible, and using AI and other technologies we can plan the inventory better, including when it has to be on the vessel based on the activity they are doing. It helps us to drive more tonnage through a square metre.
What future impacts do you anticipate from the crisis?
I think it is an opportunity. The world is changing – now faster than before. The oil price has a big impact on the planning and one has to be quite nimble and flexible to be able to react to any massive price movements and understand that the price is not going to be where it was before. This will have an impact in terms of people working from home, which decreases the demand for oil. It will also result in the acceleration of renewable energies.
In Nigeria, given the fact that we had the last marginal field bidding round 17 years ago, there are many opportunities for new players to bring in new technology, especially in the field of cost cutting, as we have not been too cost-cautious here.