12 March 2012, Sweetcrude, Lagos – The Executive Chairman of Kaztec Nigeria Limited, Sir Emeka Offor, in this interview told Sweetcrude that in view of the company’s successes in onshore oil and gas projects, the company plans to go into the deepwater terrain, to demonstrate indigenous capacity in the region, still largely dominated by the multinationals.
Excerpts:
Since Kaztec Engineering was incorporated what has been its milestone accomplishments in Nigeria’s oil and gas industry?
Kaztec was incorporated in Nigeria, in June 2005, and y the special Grace of God, it has grown to become a leading Engineering, Procurement, Installation and Construction, EPIC contractor in Nigeria. It is a subsidiary of the Chrome Group, and the company has performed creditably over the years in terms of quality of delivery and meeting project deadlines to the satisfaction of our clients, and will continue to improve on these.
Haven said that we have handled a number of oil and gas projects in Nigeria. In the 2nd quarter of 2007, Kaztec was awarded a 24 inch, 107 kilometer, Calabar to Adanga Pipeline EPC contract. Again, in the 3rd quarter of 2009, we got another contract – Pipeline Integrity Assessment and Metering Station Rehabilitation and Upgrade/Expansion of Metering Facilities. In the 1st quarter of 2010, Kaztec won another contract – TB: 1921 Call Off contract for the Installation of Subsea Pipelines and Topsides for Addax Petroleum Development Company Ltd. These projects are all on-going, and are in advanced stages of completion.
As a matter of fact, the Pipeline Integrity Assessment and Metering Station Rehabilitation will be completed by April 2012, while we are in third phase of the three-year subsea pipeline installation/topsides setting for Addax, and tie-in programme.
As an indigenous EPC service provider, what would you consider to be Kaztec’s strongest selling point as far as engineering procurement and construction is concerned?
Kaztec has been able to put together a first class Engineering Procurement and Construction organisation. We have procurement offices in Lagos and Dubai. Our procurement staff are highly experienced and are tasked with providing equipment and materials for construction operations, barge supplies for pipe-lay and lifting operations. Kaztec has acquired assets that are fit-for-purpose such as DLB Ekulo Cheyenne with 800tonnes fixed Manitowoc Crane, capable of meeting a good percentage of lifting needs and pipe laying in the West African sub-region. We also believe that we have had a modest but successful offshore pipe lay and hook-up experience in the last one year. Kaztec also provides a turnkey EPC capability with emphasis on project management and engineering installation solutions. It provides all the components of EPC contracting, but the value is often defined by engineering to reduce the time and cost of the offshore construction.
How compliant is Kaztec to Nigerian ownership In terms of shareholding, management and staff expertise?
Kaztec is 100 percent Nigerian owned. The management is also fully Nigerian. In terms of Staff expertise, less than 20 percent expatriate staff are engaged in the offshore installation jobs. It may interest you to note that all our onshore installations are handled entirely by Nigerians
Which project do you consider as the most challenging in terms of conception and execution?
The Addax TB: 1921 contract is the most challenging in terms of coverage, variety and duration. It is a multi-year contract and covers the installation (including commissioning support) of numerous subsea facilities including pipelines, risers, spool pieces and other seabed equipment. It also involves the installation of platforms, structures and topside facilities and the hookup of above water facilities in various locations offshore Nigeria.
There will be many campaigns during the life of this contract, which is expected to last at least three years. It is challenging because it involves five separate and different offshore construction spreads, and many ancillary support vessels to complete the work, in a variety of water depths that require remotely operated vehicle, ROV, air and saturation diving in the current campaign.
Kaztec, like most EPC service providers operates in the Niger Delta terrain where issues of host community agitations have remained intractable for so long. What has been your experience in this regard?
We regard and treat our host communities as partners in progress, and therefore, take them along in whatever projects we are involved in the community. This way, we are close to our host communities and carry them along too. However, community agitation is still prevalent in the Niger Delta region, and indeed widespread in certain areas of the region. To mitigate the adverse effects of community restiveness, we developed a Community Relations Policy aimed at truly treating host communities as key stakeholders and engaging them on a continuous basis. Kaztec enters into Global Memorandum of Understanding, GMoU, with them which are aimed at improving or providing infrastructure, engagement of community members into the workforce, direct financial payments to key community projects or groups. These are done in addition to contractor’s responsibility to preserve the environment.
So far, Kaztec has only experienced minor issues with its host communities. Even so, we are proud to report that 100 percent of those issues have been resolved. Kaztec has a full time Community Relations Staff focused on continuous engagement, mediation, prevention and resolution of crises, if, and when they occur.
From its incorporation, Kaztec set out to achieve indigenous participation in the oil and gas sector at a period when the issue of Nigerian Content was not on the table, what propelled the company to follow such path?
Kaztec believes that the secret to success in the oil and gas sector is ones’ ability to deliver products in a safe, suitable, cost efficient and timely manner. These factors are universally preferred. We created an indigenous company specialising in oil and gas services in Nigeria at a time when Nigerian Content was in its infancy. Our vision was to create an indigenous EPC capability, covering both onshore and offshore where few other indigenous companies ventured. This vision I believe is dynamic, and will continue to grow to encompass new capabilities leading the company to become a major player in the West African Oil and Gas industry.
In your opinion, what are the limitations confronting local oil service companies like Kaztec under the current local content regime?
The single largest limitation is non- availability of funds in terms and conditions that will ensure we remained in business. Despite these obstacles, Kaztec has been able to establish a level of trust with our customers and subcontractors that allow us to function in a profitable manner.
Companies like Kaztec have many challenges under the local content regime. These include the necessity to employ local staff in senior positions when there is a dearth of qualified manpower in the Nigerian oil and gas industry that have the requisite expertise and skills set. This is not unique to Nigeria; it is a common challenge that can be found in many countries around the world. But flexibility in enforcement in the early years and extensive training of staff will enable more Nigerians to gain the necessary level of experience and expertise that is needed to sustain effective operations.
Our vision is to develop a highly motivated team of suitably trained and expert indigenous workforce, with a business-focused mindset. We strongly believe that our people are the key to developing our vision, and working effectively in a team-oriented and focused environment, will significantly enhance their productivity.
Kaztec participated at the just-concluded NOG 2012, in Abuja, and also plans to participate at the Offshore Technology Conference, OTC 2012, in Houston Texas, billed for late April, what does Kaztec intend to achieve in these exhibitions, and what is the central message in this regard?
Kaztec expects to be able to present concrete proof of its ability to on deliver offshore oil and gas projects. We will bring hand bills, posters, and audio-visuals with our key personnel on ground to share our story with attendees.
Kaztec participated in the NOG in Abuja for the first time, and there, we showed proof of our successfully completed projects and sub projects in recent years, through which and we developed a track record for onshore and offshore construction project delivery.
We believe that it is time to share these successes with the global petroleum industry, and broaden our horizons with new contracts and capabilities going forward. The central theme is that Kaztec is a full-fledged EPIC contractor with onshore and offshore capabilities second to none in Nigeria. Kaztec’s offshore fleet include: the Ekulo Cheyenne DLB, the Ekulo Tornado DSV and other associated support vessels. We will continue to expand the fleet as the need arises to meet the growing needs of our clients. We also subcontract specific specialist services as required.
Going forward, how far is Kaztec willing to go to achieve its local content dreams and global vision?
Our current capabilities include onshore pipelines and stations, EPIC and offshore subsea pipelines and platforms. Going forward, we will extend these capacities to larger projects with enhanced EPC capabilities. We expect to move into deep waters offshore Nigeria and then other West African countries.
In addition to these, we will expand into new areas covering onshore pipe corrosion and concrete weight coating, onshore platform fabrication, onshore supply base (for the offshore fleet), a free zone port and a host of others in the coming years.
We strongly believe that Nigeria will soon be exporting technology and services to other African countries and regions, in the near future.
