26 February 2019, Sweetcrude, Lagos — Helping offshore oil and gas industry increase efficiencies and reduce costs, through a range of products, systems, and projects, is our main driver, says Aquaterra Energy’s Stewart Maxwell, the company’s helmsman in charge of its technical operations.
In this chat with OpeOluwani Akintayo, he says the company’s major contract with First E&P for the supply of its Sea Swift platform, is a game changer in Nigeria’s oil and gas sector, and a pointer to the growth of local content in-country.
Your clients have been in the North Sea, South East Asia, the Caribbean, and Australia. Why come to Africa?
This is not a new thing for us in Africa. We have in the past supplied equipment and services, including two platforms in Angola. We have also supplied platforms to the Republic of Benin- it is half an hour from Lagos so you can go and look at the platform. We have always made supplies in North Africa in the Mediterranean through Egypt. So Africa is not a new region for us. We have always wanted to expand our capability and services here.
But you are relatively new in Nigeria, just last year
When we did the work for the Republic of Benin, the client was based in Nigeria. I have been with Aquaterra for over five years, and we have always been active in Nigeria, trying to generate work, and speaking with potential clients and customers to make significance move and supply into the country.
What were those opportunities you saw in Africa? Is there enough market for your products?
Of course, there are markets for our products. But while we were at it, part of the challenges was getting to talk to both international oil companies and also local ones. Over the past six years, as we were probably beginning to take discussions to the next level about supplies, we had the energy crunch and crash in oil prices which reduced the level of work and demand and drilling companies were doing. And that put a hold on the projects or canceled a lot of the projects we were speaking to operators about, not just in Nigeria but all over the world. But in the last 18 months, all over the world, companies have resumed work, and those discussions have picked up again. Specifically, within Nigeria, I would say, part of those push has been on the sea swift platforms. Currently, we are working on design and supply of two of them in Nigeria. We see that it’s clear of sign that we are breaking into the market, to supply our products that will allow a faster time to fast oil, and a significant part of the work such as fabrication will be done in Nigeria.
Obviously, there have been other engineering companies that offer your kind of services and products in-country. What makes those of Aquaterra unique?
I would say that we are specifically on the platform side, and I will disagree with you, that there isn’t an indigenous company that offers that specific technology. All of our structures are developed to meet the specific needs of our clients. Sea Swift offers ultimate flexibility, with a modular system that unites the advantages of a platform with the rig-run benefits of a subsea development. In shallow water applications, this now widely used platform helps customer achieve reduced build costs, lower installation costs and importantly, a simplified critical path and quicker time to first oil.
How did you get the contract with First E&P?
We engaged with First E&P in conjunction with our local partner, Merlin. We first engaged with First E&P like five years ago prior to the oil price crash. They were looking at developing the asset in a timely manner. Although the market was busy however, capability was limited, and the sea swift platform that we provide allows you to have a smaller fabrication yard if need be. It’s an enabling technology that gets your first oil quick up, and that was very attractive to First E&P. Then we met with the NNPC, NAPIMS where we explained what we would be doing. But not too long, the market collapsed so nobody was willing to spend money on drilling at the time. So when the market pecked up again, we re-engaged with the project, and they were looking into getting their first oil quickly. The bid was opened to a number of companies, and we were one of the companies that applied. We submitted our technical and commercial bid as opened to other companies, and we were selected by First E&P to be their vendor- the one they want to work with on the project.
The conceptual technology in being done the U.K, but all of the detailed procurement and fabrication is taking place in Nigeria. In future, that level of Nigerian content only increases and we will get to the point where majority of work on the projects will be done by indigenous companies. we will eventually have a Joint Venture with a local company, or as we are doing at the moment, working with a very capable supply team in Nigeria that is providing the services we need on this kind of job.
Has work started already?
Oh yes. We are well underway. The design work is more than three quarter completed. Fabrication has started in two yards- one in Lagos, the other in Port Harcourt. Materials have been imported, and local companies have supplied, fabrication is taking place. The first part of the platform will be fully installed by the end of this year, and the other one will be afterward.
How long will this project last?
From start to finish for the first two platforms, we are looking around 18 months.
That’s going to cost a lot of money
I’m afraid, I can’t release that information to you.
We have had issues where such contract comes with foreign companies ferrying expatriates into the country when there are capable hands in-country. How many foreigners are you bringing in as against Nigerian indigenes on the project?
I would say of the people employed in this project- the team here in the U.K is doing some of the conceptual engineerings. The detailed engineering is being provided by an engineering company in Nigeria. All of the fabrication is heavily rested on our local partner, Merlin for local procurement. And in terms of engineers going into Nigeria, we have a total of five expatriates and that are involved with the fabricators, liaising with the fabricators. On one fabrication side, we have two expatriates but they are supported by three or four local engineers. And from our side, the vast bulk of the workforce for the fabrication is from Nigeria.
I totally agree with you. I believe that Nigeria has a large number and quality of staff that can be used on this project, and we are maximising them.
What is it about your modular platform design?
In its largest configuration, Sea Swift can take the form of a significant platform. The Sea Swift modular design concept allows a central wellbay module, typically containing up to 12 slots to be combined with separate process modules. This innovative modular design allows for a significant sized platform to be installed, whilst maintaining the benefits of our Sea Swift concept. The modular platform system has also been considered for landlocked developments, where access to and from the port of disembarkation is narrow. Modular sections that are 12ft wide are easily transported on the back of a standard low loader and delivered to the port. And the single sections can then be shipped to the development side and constructed into a standard topside facility.
After 14 years in the business. How challenging has it been? Good or bad?
I can say there’s a variety of things. We are a market leader in a range of equipment that we supply. We supply for sale and rent of riser systems. We are a market leader in a range of high-pressure riser systems which allows you to drill subsea wells from jackups. We have recently been awarded in the North Sea, some very prestigious contracts for equipment supplies of centralisers. And other equipment for over forty and fifty-year lifespan will be installed which is new and cutting edge.
On the platform side, we are the only company that has designed the conductor supporting platforms that have two-part structures installed. As a company, we have supplied a two-side conductor supported platform which is in 65 meters water depth- the deepest any platform can be installed, and we supply the platform with the heaviest topside for that type of structure. So we are a market leader in that type of platform. We are proud that we are present in West Africa. We are hoping to expand in Nigeria. We have worked worldwide in most oil-producing regions, and we hope to keep expanding.
What security and environment safety measures have you put in place where you are working in the Niger Delta, to make sure there are no complaints from the indigenes?
I have traveled to Nigeria a couple of times, and I have felt nothing other than safety and welcome by the people. Since we are doing a project in Nigeria, it is completely understandable that we maximise the level of work here and use it as a way of enabling growth as a company. We are putting trust faith and work into Nigeria and we are sure we would be respected for that.
For the team in Port Harcourt, they are based in the fabricator’s yard. These platforms are for OMLS 83 and 85 so clearly, it’s right in the middle of an open sea. So environmental safety is a clear driver. And the design will ensure that the environment is safe. The platform structure design is such that will take note of the norms and should not cause any pollution. And after we hand it over to the client, and the wells will be drilled. They will also make sure that the safety of the environment is considered. Our platforms are designed in such a way that they don’t cause any harm to the environment. The produced fluids from those platforms will be transported to a flexible riser to an FPSO where production will take place. It is sea level production, and we are following all international and Nigerian standard so we don’t have any challenge with the environment.
What’s the company’s plan in terms of expansion in the next five years?
What we would like to see on the basis of these two platforms, is to draw other IOCs to see what we can do. If they like that technology, then we can grow and supply those technologies to Nigerian companies. We want to increase our presence in Nigeria to the extent that will allow us to increase local content in the country on these project.
We as a company, we have done work within West Africa, but this is our first significant work in Nigeria. We welcome the opportunity provided with First E&P to work with them. This is the first greenfield development taking place in Nigeria in a number of years, and we are happy to be the driving force behind it.