Mr Anwar Jarmakani is the Chairman of Nigerdock Plc, a member of the Jagal Group. In this interview with some select journalists, he expressed his concerns over imminent monopoly in the logistics sub-sector of the oil and gas sector which he claimed will double the cost of logistics in Nigeria. OLATUNDE DODONDAWA was there.
Can you tell us about the issue of monopoly in the logistics sub-sector of oil and gas sector?
Nigeria must sell itself, we must sell what we are good at. We must sell what we need people to come and invest in. We need consistency of government policy. We as a small company, we bring benefits to the nation. It is not about money but about what we do which we do professionally. Since 2003, Intels directly fought this company using government agencies like the Nigerian Ports Authority (NPA), the Customs, ministry of transport and every possible departments to absolutely harass us. We won projects of logistics from Shell, Chevron and ExxonMobil, a two-year process, we were awarded the projects in other to reduce their production cost. Intels sabotage the projects and killed them. With every possible accusations, they brought us to standstill. But that is history.
We developed these facilities and we have our auditors as KPMG. We have sunk in $500 million on this Island. We are not saying we want to invest, we have invested, we have proved to every oil company that we will serve them right. You cannot buy a 10-room apartment and be told you can only use two rooms. We are in logistics, we are into ship repairs and maintenance, we are in fabrication, we want to be allowed to do our business in compliance with the laws of Nigeria. We will do nothing that is not in alignment with the federal government of Nigeria. We are determined to support this government because we are in serious recession.
Currently, logistics in Nigeria adds between minimum $2-$4 extra cost to every barrel of crude oil produced in Nigeria due to monopoly. The monopoly created alone and we have researched, there is no law that says only Intels will receive cargoes before it can go to any other facility in Nigeria. This facility has been receiving cargoes since 1986.
Do you really have the capacity to handle these logistics?
We have trained 6000 people who have been trained and certified in various fields in area of fabrication, logistics, safety and all are relevant to our business. We have handled several projects for the International Oil Companies (IOCs). And we still need more jobs to provide more employment for Nigerians.
You have expressed deep concerns about imminent monopoly due to a directive you mentioned which directed all cargoes to berth at Intels facility before any other fabrication yards, can you expatiate on this?
There is something like a ‘project’ being sold in the country for many years that all oil and gas related services for incoming shipments into the country must first and only go into Intels facility before it can proceed into any other facility within Nigeria. We believe there is no such a law and it doesn’t exist. We believe that Nigeria needs competition and no one must have a birth right to monopoly on goods and cargoes. The law is very clear, ‘you are free to choose the destination of your cargo for as long as the destinations do exist and do comply with the laws of the country which is Customs territory, the NPA approved and it has the infrastructure and licensed under the normal laws of the country’. We all fit within the category of the law. Therefore, we are saying that sometimes, the monopoly creates situations and made people believe that these cargoes can only be discharged at Onne Free Zone and only from Onne that it can go to other destinations. This means double cost to the government of Nigeria on crude oil production.
Is this related to what you said about additional cost to producing a barrel of crude oil?
When you have double handling of cargoes, it automatically resulted into double costs. That’s what it means. So if you handle the cargo twice instead of one destination, it means you will pay the cost twice. The cost of logistics on every barrel of crude oil produced in Nigeria is between $2-$4, according to experts.
In that case, can you tell us what Nigeria is losing to the logistics problems that you are talking about?
The current cost of logistics in Nigeria is in the region of $24 per barrel. This is unsustainable going forward. So the industry has to join some of those services in order to bring down the costs because crude oil is no longer above $100 per barrel. We are in the $40-$50 per barrel regime, therefore, the cost of logistics have to drop. How to drop this is to encourage competition in more services and more locations in the environment.
What services does your company render?
Nigerdock Plc is a member of Jagal Energy Group. It is the leading indigenous Nigerian energy services company with diverse but related capabilities in complex oil and gas project delivery during both the greenfield and brownfield stages of an asset lifecycle.
The range of services offered include full Engineering, Procurement and Construction (EPC), or stand alone engineering, procurement management, onshore and offshore fabrication, brown field modifications, fabric maintenance, asset maintenance management, ship building and repair, marine services, logistics and the associated base support services.
Nigerdock is strategically located in the Snake Island Integrated Free Zone and offers a fully integrated support service to the upstream oil and gas and broader energy sector.