Aquashield Oil & Marine Services, Managing Director, Nasir Saulawa

Pirates are using more sophisticated and powerful boats, and so local marine companies must continually upgrade and maintain their equipment and vessels.

Nasir Saulawa Managing Director Aquashield Oil & Marine Services

in figures

Number of vessels purchased in 20145

Aquashield Oil & Marine’s fleet utilisation in 201490 percent

Newbuild programme in 2015 consists of4 fast intervention security vessels

Pirate wars: New shipbuilding rules impact security in Nigeria

February 27, 2015

The managing director of Aquashield Oil & Marine Services, Nasir Saulawa, speaks to TOGY about offshore security and new shipbuilding policies in Nigeria. Aquashield Oil & Marine Services is a Nigerian marine services company with 13 maritime vessels including seven fast intervention security vessels, three platform supply vessels and three anchor handling tug supply vessels.

What level of activity do you foresee in the marine security services sector and how can local players stay at the fore?

The marine security services sector will continue to be in demand. The most important driver in being competitive in this sector is equipment and utilisation rate; pirates are using more sophisticated and powerful boats, and so local marine companies must continually upgrade and maintain their equipment and vessels. As a security vessel company, you need a memorandum of understanding with the local navy in order to deter these attacks from happening. This is key to staying competitive.

Oil companies are taking offshore threats and kidnappings seriously. They are adopting the right security measures and policies and ensuring that their vessels are sufficiently manoeuvrable. However, they are usually attacked as they slow down to make their approach to port. Most of the attacks are on foreign vessels, which are not allowed to carry armed personnel, so it is important that these oil companies establish partnerships with marine security companies.

How would you assess the appropriateness of the Nigerian Content Development and Monitoring Board’s (NCDMB) new policy related to shipbuilding for the Nigerian maritime industry?

In November 2014, NCDMB announced that all vessel owners wishing to build a ship or bring one into the country must submit their blueprints and plans to the NCDMB. The government organisation will then assess which parts of the ship can and should be built in Nigeria.

Additionally, they review the blueprints to ensure that they conform to local market standards. This will not impact newbuilds very much, as they already require certification from testing, inspection and certification services companies, such as the American Bureau of Shipping, Bureau Veritas or DNV GL. It will help for older vessels. These tend to go out of class if oil majors decide to not take it under contract, largely due to apathetic maintenance practices.

 

On the shipbuilding side, however, the law is too ambitious. To construct a seagoing ship, you need personnel that have the right experience. To expect that this will happen between November 2014 and January 2015 is unrealistic, particularly given the context of Nigeria’s relatively weak and underdeveloped manufacturing capacity.

Ship owners had no idea about this law until it was publically announced in November 2014. There was no interaction with industry players to help them adapt and prepare. As a country, we hardly manufacture, so how can we jump straight into constructing ships? There must be a standard and certain level of experience to undertake this. Giving this responsibility to an industry that lacks capacity threatens standards and safety.

Which particular products and services sectors will see the greatest growth in demand in Nigeria’s maritime industry?

The Nigerian oil and gas industry is venturing into deepwater exploration, so we are likely to see development in platform supply vessels with larger deck spaces and dynamic positioning (DP). In 2014, there was a higher demand for DP-2 vessels and the industry expects 2015 to yield a greater demand for DP-3 vessels.

From a capacity standpoint, local companies are not fully prepared to take on the growing demand from this sector on their own. We still cannot compare international shipping competitors, such as France’s Bourbon, to local companies due to the former’s international experience and how it impacts their quality and standards.

Training and research are key to narrowing the gap. There have already been improvements on the training side through programmes implemented by NCDMB such as the marine vessel utilisation scheme, which aims to boost local content by encouraging vessels to be constructed at Nigerian shipyards. NCDMB required all contract holders to have formal training programmes by the end of 2014. With the training programmes, local players could serve 50-60 percent of the sector by the end of 2015.

How can marine services companies position themselves favourably to access funds from banks?

There are no cheap loans in Nigeria and competition among local companies is high. The interest rate on a bank loan for a company in the country stands at around 23 percent in Nigerian Naira and 12 percent in US dollars. Meanwhile, a company operating in the US receives a 6 percent interest rate on a loan. The key to combating this issue is by providing collateral in the form of long-term contracts, experience and a proven track record. Banks would be willing to lend money under these circumstances.

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