The Managing Director, Falcon Petroleum Limited, Prof. Joseph Ezigbo, in this interview with DAYO OKETOLA, speaks on the challenges facing the oil and gas industry, among other issues
What do you think about the Federal Government’s Local Content initiative and what role is Falcon playing in it?
Local content, for most Nigerian companies, simply means how many contracts the International Oil Companies give to the Nigerian people. This, for me, is not local content. Local content, for me, starts from when you are capable of taking something, dismantled it and you are able to introduce all the parts and package it together. It’s not the number of contracts you get. When we set up Falcon Petroleum, we told ourselves that every aspect of the services of the company will be done by Nigerian engineers.
When we were planning the Ikorodu project, NNPC asked us, ‘Who are your technical partners?’
We told them we did not have any technical partner.
They said, ‘But you cannot do it?’
We told them we could do it and asked them to allow us to do a presentation. We made several presentations and luckily, we had some men in NNPC that believed in the Nigerian dream. Former President Olusegun Obasanjo also ensured that Nigerians came into the oil and gas industry. Without him, the Nigerian Content initiative wouldn’t have had any foundation. When we applied for the Ikorodu gas project, we almost lost it but Obasanjo stepped into the matter and said, if there are Nigerians who can do the job, give to them and let them try it. People were asking us who were our technical partners but we didn’t have. We told them we only had the competence and young Nigerians engineers. Having been given the opportunity, we have, today, proven to everybody that it can be done by Nigerians. Welding pipe is not rocket science. Distributing gas is not rocket science.
What can be done to ensure that the local content initiative succeeds?
Nigeria needs the political will to call the bluffs of anybody who thinks he can take Nigeria for a ride. We need to say these things must be done by Nigerians. When a child gets up to walk, he falls every now and then until he perfects his walking. That’s what should be done with Nigerians.
The idea of giving major projects to foreigners while Nigerians do the menial jobs should end. Lets us try, let us fail and let us get it right. The only way we can get it right is by failing because anyone who is afraid of failing is afraid of progress. And the only way we can do it is to empower Nigerians.
The Petroleum Industry Bill has been on for over a decade without being passed. What is the way forward?
In moments like this, I wish we had people who can override every other group and pass the PIB without going through all these processes. We have various issues in this country. We have various groups and it is difficult to harmonise them. As long as we continue saying let’s sit round the table before the PIB will be passed, we will never get it passed and we will just be wasting our time. There are too many interests that want to be met at the same time.
Nigeria is losing a lot of money to under-developed gas infrastructure and flaring. Don’t you think this is condemnable?
You cannot say the Nigerian gas resource is under-developed; the truth is that it is not developed. As we speak, this country flares close to $2.2bn every year and this, for me, is criminal. Both the government and the IoCs are to blame. There is no reason why this country should be flaring that volume of gas. It doesn’t make sense. Go to Anambra alone, we have 128 industries that are dying to use gas to power their operations. They work today; tomorrow they don’t work because there is no power. Go to Lagos, we have gas in Lagos, Agbara, Ota, Shagamu, Abeokuta and Ogijo, among others, but the industries don’t see gas.
May be the infrastructure is not adequate
The infrastructure will flow in there if there is openness and a level-playing ground for everybody to take the gas there. What will it take to take gas to these places? It will not cost NNPC, IoCs and NGC a dime to take gas there. Even the existing gas distributors: Shell Nigeria Gas, Gaslink (Oando) and Falcon Petroleum. There are only three of them. Gas Land is only about to start operations in the Lekki/Epe axis. Say to them, we need gas in those areas in two years. That is all that is needed.
Is it that government is not coming up with the right policies?
Fantastic! There is no policy. There is no push. We know we need this thing but nobody is ready to bell the cat. The Gas Master Plan is there but there are too many components and the bureaucracy militating against it is incredible. But I know that if the PIB is passed today, the Gas Master Plan will see the light of day. If you pass the PIB today, you can say bye-bye to all the problems plaguing the industry today.
After close to 20 years of operations, what is next for Falcon Petroleum Limited?
Falcon Petroleum started as a company empowering other companies to use gas. We can proudly say that we have converted over 80 per cent of all industries in Lagos- from Ikeja, Agbara, to Ikorodu, and Ota in Ogun State, to run on natural gas. Now, we have consolidated on gas distribution in Ikorodu and we are branching out. We are hoping to move to Enugu to distribute natural gas. Luckily, we signed a Memorandum of Understanding two weeks ago with the company that brings gas to Enugu. By the end of this year or early next year, we should start distributing natural gas to companies in Enugu. We are also branching into gas in Ghana and we are moving into Sierra Leone. These are some of things we are doing and we will continue to make viable investments.
Can you expatiate on your foray into Ghana and Sierra Leone?
We have a four-inch gas pipeline that is supplying our gas station in Ikorodu, but we are limited to the volume of gas that pipeline can carry. As such, we made presentations to the Nigerian Gas Company and the Nigerian National Petroleum Corporation and they granted us the permission to increase the four-inch pipeline to 12 inch pipeline. But we are not even removing the four inch pipeline, we are building a 12-inch line along the existing four inch pipeline to increase the capacity of gas supplied to our gas station. What is the implication of this? All the companies in Ikorodu have wanted to expand, but that expansion has not been possible because we didn’t have enough gas. But since we got this EPC contract from NNPC, we’ve finished welding the 12 inch pipeline from Ogijo to Ikorodu. What we are waiting for are the motorised valves and the big components and in the two months, we can finish the work. Once we finish, gas will come into our station at close to 70 bars and the volume will be more than a 100 million standard cubic feet. We can do up to 25 million scuf today and what that means is that we can do close to 7 million scuf to 8 million scuf per day. With the increase in gas pipeline capacity, we intend to do 15mscuf per day and that means double the volume we are currently doing.
Any plan for expansion?
We are also thinking of moving to Ghana because Ghana represents another booming economy in respect of gas. We are partnering with some companies in Ghana to help them develop their gas. Just like we started initially as a converter and internal pipeline company in Nigeria, we also want to do that in Ghana. We are also trying to partner with the Sierra Leonean government to build a tank farm because they incessantly run into gas shortage due to lack of strategic storage.
What we have always wanted is to distribute natural gas to every nook and crannies of Nigeria and Enugu offers us a good opportunity. We also wanted to partner with Orient Petroleum to do the same in Anambra because it is building a refinery around Otuosha, but that hasn’t seen the light of day yet. We are hoping that with time, Orient will overcome the challenges and we will also get there.
Are you expanding to other sectors beyond oil and gas?
If you look at the economy and the activities of the International Oil Companies in Nigeria, especially as it concerns marine services, you will find out that the marine services are dominated basically by foreigners. And in the spirit of the local content, we think it is an area that we can effectively move into. We have been an EPC company from the beginning before we started diversifying and we think that Nigeria has come of age where the marine services in this country should be in the hands of Nigerians. It is an area that is fast-growing and we think Nigerians must invest massively in it. These things are not rocket science, these are things Nigerians can do once the financial capability, the technical capability and the political will are there. We think it’s one area we can move into and make impacts. So we are putting everything together to launch into the marine sector.
What is the financial outlay for this expansion?
The money we are investing is large, but luckily for us we have partners that believe in us, that believe in our capabilities and our efficiency and they are partnering with us to make sure that we get to where we are going.