Maintaining standards, discipline key to indigenous oil companies success
Kayode Adeleke, senior executive vice president,RusselSmith Group Nigeria Ltd, an indigenous integrated oil Services Company with specialty in asset integrity management tells Olusola Bello, Energy Editor how indigenous companies can remain competitive in a challenging oil and gas sector.
What makes your company an integrated one?
This is because not only do we carry out service of topsides facilities we also maintain subsea and aerial facilities. We provide integrated services to our clients to ensure that their assets have an end to end solution from a single company that has the experience and specialty.
How much of foreign component do you have in your operations?
From inception 11 years ago, RusselSmith has been wholly an indigenous organization, regardless the name, which is more of a marketing gimmick. Because we wanted to fit in easily in an industry that is dominated by international oil companies, we adopted a name that sounds multinational.
While we are a local company, we look at ourselves as a global company because we do not want to restrict our operations to within Nigeria. We want to compete with any company across the world.
But to do this we need to build our competence and ensure that the same standard or quality that are practiced anywhere in the world are sustained by us. This is why we are ISO certified organisation.
In 2008, we became ISO certified; this is the standard that determines certain set of procedures and policies which are globally recognised and acceptable to companies anywhere in the world. This has helped in ensuring consistency in the level of the service we provide for our customers.
We also engage in a lot of training. We are the first indigenous company to facilitate access to certain areas of deepwater offshore. As an organisation we trained the first set of Nigerians as level one, level two and the highest level which is level three of that technology.
We take training very seriously, in fact, training for us is not just mandatory, it forms part of the appraisal system of our staff. It forms part of what affects their career growth in any organisation.
We have had technical partners in the past, even now we still have technical partners in areas that we still need them. As the years went by, we stopped having them. Because after learning, understudying and getting certified we did not see the need for them.
Though we have a few expatriates, about 85 per cent of our workforce are Nigerian nationals. The expatriates exist in areas where we also still want the transfer of technology to continue.
We planned to expand our subsea services this year 2017 obviously we are going to be working with partners to improve our competencies.
With the skills we acquired we are able to go straight to the international oil companies (IOCs) and tell them we can compete with any multinationals because we have the standards, the quality, commitment and dedication.
We also have safety standard in the organization that is unsurpassed in the industry. For example we celebrated over three million man hour of working with zero loss time injuries (LTI).
What is the relevance of your operations in the Nigerian economy?
Our country is still a mono economy, until there are effective changes in other areas of the economy, oil will still remain our main source of foreign exchange income.
We are like mechanics in the oil and gas industry if you don’t service your car, it will break down. It is the same thing with the assets we service for the customers.
If those assets are not properly maintained or their integrities are not ascertained often, you will have unscheduled down time which means our production of crude would drop. If this happens we know what it would do the bottom line of the country. So this is the connection.
How has your company been able to survive the vagaries of lack of investment in the last 10 years?
We focus more on differentiating ourselves in terms of quality, consistency, customer experience is very important to us. If you develop your competencies what you are going to find is that you become more affordable to the customer, you don’t have to be bring foreign—resources all the time which more costly, but you become more competitive. Apart from your costing, if your quality is even better than the rest industry operators, obviously people would want to come back to you.
This company has always been a company that has always planned. What happened in 2016 was what we have planned for since 2014. We planned for what we needed to do, what strategy we needed to put in place for cost effectiveness, for employee engagement, for improvement in our customer engagement and become relevant in the industry.
As an indigenous company, how have you been able to manage relationships with IOCs?
To be honest there are two sides to the story, one part, I do agree that if there are more enabling policies it would help to encourage more indigenous companies coming into the industry and empower them.
However there are different forms of empowerment, financial empowerment gives companies access to funds. In other parts of the world if multinationals come into the country, the government compels it to liaise with local companies and have engagement plans that show what kind of development plans they have for local companies.
On the other hand, indigenous companies need to look inwards, we have the resources, the intelligence, but we have to be disciplined enough. Many people collect loans and did not use it for the purpose.
Why do multinationals come to this country and excel? What are they doing differently? We need to understudy them, see what they are doing right and see how we can improve on it because we would always have the advantage as indigenous companies if we understand their technologies.
When there are issues with the customer, we should take preventive and corrective actions to ensure that such issues don’t happened again. If our customers have complaints we resolve it and give feedback and with the right policies, indigenous companies we do better.
How would you assess the local content policy with the challenges inherent in it?
When it comes to local content and the Petroleum Industry Bill (PIB) there have been too much back and forth on them, everybody has different opinions with many stakeholders having their interests.
Ultimately I am hoping that the local content policy and PIB would achieve their objectives which are to empower local companies and also deliver quality jobs to the industry.
How has your company taken advantage of local content policy?
We do a lot of training. Within our organization we tried to empower our people. We look at everybody as a leader and as leader there are certain qualities you need to have, you need to have commitment, dedication reliability. With these you now begin to have a personal brand where people can depend upon.
Give us an over view of the oil and gas sector in 2016
Industry has been quite tough in 2016 to be honest obviously due to a combination of factors some of which are drop in crude oil price and unfortunately we also have not managed our resources properly when we had the excess we could have used to develop ourselves or weather the storms during times like this.
It has significant impacts on organizations; customers have downsized seriously by cutting their budgets and also have slashed rates everywhere. A lot of contracts have been stopped due to budget constraints. Unfortunately a lot of indigenous companies have had to fold up because they are heavily indebted. It is being quiet a tough year.
2017 outlook?
2017, to be honest I don’t see being better than 2016, yes there might be this fluctuations, some people predicted that the price of crude would improve, yes, but to what extent? Would it get to $60 a barrel or $70 b a barrel? I don’t know. However what I believe is that 2017 would be as tough, if not worse than 2016.
I have not seen major steps in the industry that would change the industry next year. What exactly has been put in place to make things different in 2017? If it improves I would be pleasantly surprised but we should continue to look inwards because in every adversity there is always an opportunity.
Despite all these challenges we should focus on the silver lining, there is always an opportunity. We might to do things differently in 2017, be more cost effective in the ways we do things and our life style should be a bit different.