PIB will determine growth of Nigerian oil industry – Baines

03 October 2014, Lagos – Bristow Nigeria Limited has been providing shuttle services to the oil and gas industry for over 50 years. The Operational Base Manager, West African Business Unit, Mr. Jagjit Bains, spoke to select journalists on the company’s activities in Nigeria, as well as the aviation and oil and gas sectors. Excerpts:

Cover of the PIB

How can the Petroleum Industry Bill influence your operation and how do you see the oil and gas market in Nigeria in the next five years?

The way I look at the market is that I work for an oil company, it is simply business. They are not going to spend money from their own pocket; whether it is the Nigerian National Petroleum Corporation (NNPC), whether it is a Nigeria company or whether it is foreign company. They spend money on improving infrastructure, on exploration to increase the reserves when the money is flowing in. As long as the cost of oil does not go up, the business is flat, they are so smart, they own the oil price will go up sometimes. When there is recession the business will boom. That is the way I look at it, but as long as the price of oil is static, the business is static.

How is the market in terms of competition?
Our strength is that we operate for the oil industry and to put it very simply to you, the oil industry is one of the industries in the world that can afford standards and quality. So they are only going to pay for a product in which they get a world standard and a world quality at a good price. The price charged by Caverton and the price charge by us is competitive. This is because these tenders go through the National Petroleum Investment Management Services (NAPIMS) and NNPC because the biggest stakeholder in the oil industry is NNPC.

So all these contracts have to go through NNPC and they are price sensitive. So we give at a very good international standard and we give at a very good price. So if Caverton can match that they will get the contracts, it is very fair but if they can’t match that, then that is too bad. So, it is not an easy business. So from that point of view I feel we are providing a very good service at a very good price and at a very good quality.

Does age affect the fleet of your helicopters?
If you have been close watcher of Bristow over the years you will find out that at different periods in our history we have gone through fleet renewal processes. We are currently in another phase, in simple answer to your question; the average fleet age today of our helicopter is between eight and 10 years.

What are your plans to expand your operations in Nigeria?
We are tied to the oil and gas industry and for the past five years we have talked on PIB and how it is going to open new frontiers in the oil and gas industry. The only way service providers like ourselves can grow is if the industry grows. The truth of the matter is that as of today, we believe that there are opportunities, however we cannot run faster than what the market can take. That is just the simple answer.  So, if we are going to project and say where we see ourselves in five years, business will largely remain flat as it is unless in the next two years there is a dramatic shift in legislation concerning PIB. There is no way we can grow faster than what the industry can take.

So as of today we have a number of operators, do we see that number increasing in five years, very unlikely. Because he mentioned investment required to startup a helicopter company, if you are not going to get guarantee work, and guarantee work is already just enough to keep three or four people it is going to be difficult to come in. So, I see the business generally flat but with a little peaks and drops along the way.

If you have more passenger traffic won’t you increase your fleet?
Definitely, if the industry demands it, by extension we will provide it. So, today if a new deep water project does not come on line in the next five years, everybody will keep serving what we have today. However, if those companies decide that they are going to go further, we are going to expand, it is good business. The flipside of this that international oil companies (IOCs) are divesting their onshore assets, that is actually not a bad thing, it is good because a lot more Nigerian companies are picking up those assets. A lot more Nigerian companies are beginning to acquire helicopter transporting services, so yes there is that opportunity. However, because it is onshore there are multiple ways to access the fields; helicopters are not the only solution. So, yes there is a potential for growth in the next five years.

Aside safety, what else distinguishes you from other operators?
Integrity is one of our core values as well. Team work is another one of our core values. So, we talk a lot about safety the reason being that it is what drives everything we talk about. So, I like that you have asked what else distinguish us from other players in the industry, it is our integrity, service, our commitment and our team work.

We hear that you don’t engage indigenes to lead your operations, like engaging Nigerians as you captain in command to fly your helicopters. This means that you are not adhering to the local content policy?
I need to state the fact very, very clearly, that is not true. There is no such thing going on in Bristow. Whenever we introduce a new aircraft type Nigerians have priority in type conversion. I remember that story that when we bring in a new aircraft types and then we bring the crew along with it, that doesn’t happen. When you lunch an aircraft into a market we send Nigerians for conversion training before that aircraft is introduced.

So it is not possible to bring an aircraft and bring two experts with it and say these two experts are going to be the pilots or something like that, it doesn’t work that way. There is no basis for that. The other thing you mentioned is that there a lot of experts you saw on the technical side, yes there are a lot of experts who work on aircraft as engineers. We have stated this several times, there is a dearth of experienced pilots and engineers in Nigeria. This is a fact.

We are not going to side step the issue, we are doing everything we can to progress young Nigerians in the system. However, you need to go through years of training. A lot of those people you see there, I would say, the least qualified person you see there would probably have seven to 10 years experience.

You want to fly an aircraft that you are confident in flying, while we are pushing for an increase in Nigerian content, I am not going to put someone who doesn’t have experience on the line to jeopardise safety. The truth of the matter is we are where we are, we see it improving in the next three to five years because the investment we made five years ago will materialise by then. The young Nigerians that we have put through the system will then be moving up. Today I can mention one or two of my colleagues who are now chief engineers but it didn’t just happen like that, they had to go through the system, they had to sit for international exams, go through international qualification and accreditation. Because what we are talking about is Nigerian content but it is global standard.

For me there is nothing like Nigerian standard, if you want to operate in the world you must have a global standard. I am telling you openly that yes there are a number of expatriates in the system but there are plans to keep progressing Nigerians are in the same system. These programme started since 1982 even before NNPC talked about Nigeria content, it just didn’t called it Nigerian content. But Bristow has consistently trained Nigerians every year without fail since 1982 as pilots and engineers. Now as human beings we all desire to grow, desire to move on. These young men and women see different opportunities and they go. I think it will be inhuman to say because I trained you, you must work for me the rest of your life; that is not what we are about. We are proud to say we have kept the aviation industry in Nigeria afloat. If you go round to our competitors and just dare to ask how many Bristow employees are in the organization, they will tell you they are many.

How is your training programme for Nigerians and your contribution to manpower development in the country?
It is a partnership that is flourishing. You were all there when we did the recent donation to the Nigerian College of Aviation Technology (NCAT), Zaria. The other day my colleague went to a helicopter flying school they just opened in Enugu. There are so much potential in Nigeria but a lot of time we are limited by funds which play a major role. We gave you the figures it cost to put one individual through pilot training up until when he can sit in a helicopter and fly. It is in excess of $200, 000. If we were to say okay let’s leave it to society to sort that out, whose children will go for those courses? Very, very few and because of our cultural stigma about flying, even rich people will not send their children for such training. So, the partnership with NCAT is going, I think it is one of our most solid partnerships. We are exploring the aviation college in Ilorin; we are also exploring the one in Enugu to see what we can do.

The one that I think is most important is engineering and how we can help and accelerate and develop that area as well. But I think we have done very well on the pilot side. Nigeria doesn’t have a strong aviation base. There are two cities, Lagos and Port Harcourt even the air traffic to the other cities is very little, Abuja is just coming up now; previously there was no traffic to Abuja. An industry like ours has to draw from the industrial base, so what Bristow is doing is trying to create an industrial base for aviation in Nigeria.

Helicopter is load sensitive, a load is what you can carry, meaning, there is the weight of the helicopter there is the weight of the fuel and the weight of the passengers, so we have to balance that before taking off. What happens with the helicopter is that it is called a rotary wing because the wings are rotating.

So it is going almost at full power, the engine is rotating the wings, but for the aeroplane, known as the fixed wing, the wings are moving the aircraft forward with thrust. If it is long distance and you have twelve sitter aircraft you have to carry only eight passengers, if it is short distance it carries less fuel more passengers. What we operate here, is that we have aircraft with 12-passenger capacity and the 32 19-passenger capacity, so those are the mix of helicopters that we operate. But when you get into the technical operation you start to factor in payload, distance and money. So what we have is 12-sitter; 19 sitter helicopters.

To what extent does weather affect your operations?
It affects it to a very large extent, in the sense that there are delays because of weather. But there are very few days in the year when we have total cancellation. We may have one or two cancellations in severe weather and because of rains. I don’t think we have ever had complete cancellation of routine, so there are very few cancellations but there will be delays.

  There is a reason for this, although these helicopters have got the same equipment as any airliner, maybe method also, but the ground equipment particularly at the Nigerian Air Force Base (NAF) in Port Harcourt does not march the equipment of the helicopter, so we are limited by the ground equipment.
The same helicopter if it is operating from Port Harcourt International Airport or it is operating from Lagos International airport then it will have the same restrictions that an airliner has because they have ILS (Instrument Landing System) and other facilities, but here we don’t have all that.

But it doesn’t affect the oil industry like I told you; maybe two cancellations in the whole year. We generally manage to finish the programme by the end of the day. For example today, the entire operation was delayed for about 40 minutes to an hour because of the morning fog.  An airline landed at the international airport but could not take off from here because of the restriction of the ground equipment at the military base. So 40 minutes late is okay, these are not schedule flights, we come under non-schedule operators.

What percentage of your cost of operation do you spend on fuel?
The ways we make our contracts with the oil companies is that we keep the cost fuel outside because the prices of the fuel keep on varying. What happens is if the contract is two years or five years and they want a fixed contract because the payment is for the helicopter not for the sits, so we say we keep the fuel out and we make a separate voucher for the fuel and they pay for it. So, as far as they are concerned the cost of fuel is not included in the contract.

The Nigeria Airspace Management Agency (NAMA) said it is building multi- lateration system to help monitor helicopter operations in the Niger Delta, would it benefit you as an operator?

We may need the system, but we have (Global Positioning System) GPS to take us to the deck (oil rigs) so there is no problem with all that. Let me give you an example, to navigate, we have GPS to go from place to place, so that is accurate enough for us. As far as monitoring of flight is concerned we have a system of monitoring our flights. For example, you saw the flight tracking in radio room, so we know exactly where our helicopter is and how we can control it in that area. It will be good if government develops such monitoring system but it has to come from the Nigerian Civil Aviation Authority (NCAA) which is under the Ministry of Aviation or with its approval.

Well, it is coming from NAMA it will help us but if it is not NAMA it won’t do us any good. The agency has the Total Radar Coverage of Nigeria (TRACON), actually what NAMA is trying to do is to establish a similar thing in the Niger Delta. If you are in the airspace in the region there is supposed to be a monitoring system such that if an aircraft is involved in an accident or anything, it is easily located, the crash site is easily located.

So that is what NAMA is trying to do to know wherever any helicopter is, they can always monitor it. So, it will be beneficial to us and the industry as long as it is under NAMA. If you take us as a company, our flight following right now is world standard, so any time an aircraft is deployed in Nigeria we know where our aircraft are, but we cannot  say the same for the authorities. So this project is to enable them have a broad view and see everybody at the same time as they are operating. So the multi-lateral project will benefit the authorities more, but it is an added layer for us.

For the purpose of the safety of your helicopters, do you monitor the landing pads at the oil rig of these oil companies?
We have a full department called the heli-deck inspectors. Every landing site has an inspection report of sixteen pages, everything is checked. Then what we do is that our heli-deck inspector takes a non-compliance list and gives it to the oil company, this has to be sorted out in one or two months’ time.

We have gone a step further in working with the companies, so if they have a particular rig or vessel that has come into Nigeria, we go as far as visiting it while it is outside Nigeria making sure that the helipad is up to standard before it even comes here. So, whatever work that needs to be done is done before it comes into Nigeria.

The helipads are safe. They can take our helicopters and we can run the operation smoothly. I understand your reason for asking the question, what is the regulatory environment, what are the benchmarks? For example, today you are flying with Bristow and we have a particular standard, tomorrow you are flying with Aero contractors that have its own standard, then you are flying with Caverton that has its own.

So all the oil companies they got together and they made a standard for everything in the oil industry. So it is called the oil and gas producers (OGP) standard, which is part of the international oil and gas producers’ standard. This is the normal standard that we use. So that is the benchmark. So, that is the standard, it is worldwide, it is the same. So when you talk of heli-deck it is manufactured with the OGP standard. That is the standard we know, then we make an inspection report as for the standard. So the oil industry knows the standard and we the operators know the standard.

Apart from weather, is there any other thing that can hinder your operations? And how do you discipline your pilot when there is human error?
In the aviation industry; say 40 or 50 years back, they found that the accidents that took place were due to technical error. Maybe they did not put the gearbox correctly or some nuts have been left loose and human error was less than technical error. But today, technical error is very little but human error has not come down as much as the technical error.

So what we do is that we check the human error and how do we check the human error? There are two pilots sitting in the aircraft. The first human error that can take place is I they start quarrelling; so these two pilots must communicate with each other; they mustn’t fight with each other. In the cockpit, every minute is accounted for because the client is paying for the helicopter; it is not to go for a journey. The pilot will do this; the co-pilot will do that, these are the checks that you will do, and there is a cockpit voice recorder that will record everything. So we try to eliminate human error by eliminating communication error between two people by following it procedure by procedure.

You will not do anything that does not follow a procedure. Why? This is because somebody will pay for it. The person (passenger) sitting there is not sitting free, he is paying valuable money and we have to provide the service for it. The second part is the training. Over the years what has happened is that the regulatory part of the training has increased a lot. The regulatory oversight has increased and we have to match it increased training. Is the regulatory oversight correct? Yes. Then there is another agency, the International Civil Aviation Organization (ICAO), who grades them. If you read the news about few years ago, Nigeria was downgraded because of the number of accidents it recorded. That was done after ICAO audit, so they came here carried another audit and upgraded Nigeria. As a matter of fact they are preparing to upgrade Nigeria into higher standard.

So the international regulatory organization can clamp down NCAA.  If you don’t comply with them they downgrade you. That will downgrade your insurance for your aircraft as the cost will go up. When your insurance goes up it becomes impossible to do business until you bring it up to that standard. So the pilot supervision has increased a lot, and the pilot training has increased a lot so the accident generally has come down.

The other thing that inconveniences our operation is when there is a strike in Lagos and we don’t get fuel, the Nigeria economy will come to a grinding halt. Like I told you, 80 per cent of Nigeria’s foreign exchange comes from oil and who supports the oil industry, Bristow. So, Bristow has to keep flying. The fuel supplier says I will give you up to one week, so what do we do? We have to build a tank farm. We have over 350,000 litres sitting over there, and our usage is not so much. Each litre of aviation fuel cost one dollar, and we have got $350,000 sitting over there. By keeping the money there we are losing money because nobody is paying us for that. We also take loan from the bank to run our business, so we have got $350,000 tied up because the supply chain of fuel is unsatisfactory. So, that affects the whole operation.

What else affects our operation?
We are at the end of a long supply chain as far as aviation is concerned. We can’t keep all the spares. It will be impossible. It will be just too expensive. So when an aircraft becomes unserviceable we have to get the spare from abroad. These things inconvenience the business and like I said, if we have instrument flight rules applicable in NAF base, then we could be flying the spares in.

– Chinedu Eze, This Day

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