A Nigerian female journalist asked an aid to one of the Nigerian Southeast State governors who was ridiculously denied opportunity to return as governor after a controversial second term election in 2011 about his feeling. This question, the journalist said, was the least of this man’s worries at that moment, but he still could not have avoided it considering its sensitivity as well as strategic news implication. So, in a swift, tacit response according to the reporter, the man said: “We cannot hide the truth; we have to face the reality”.
Nigeria is endowed with rich oil and gas as well as very many other mineral resources. Investigations have revealed that at least five out of every ten Nigerian young men and women are potential assets to raise the industrial and economic profile of a country with so much resources but bedeviled with so much impunity and obliterative tendencies.
These young Nigerians are still hidden and yet to be exploited, and some of them who are already hatched are scattered in areas where arguably they have little or no relevance. In this brief interview, Engineer Dr. Johnny Enayomo Esike of Sykes EnergiProjekts Limited, reiterates the urgent need for good and exemplary leadership as driver of industrial development, power sector reform and economic growth.
Q. Sir, Sykes EnergiProjekts Limited is barely six years old or so in engineering design and construction in the oil and gas sector and related industries. How has it gained such popularity within this short time?
A. Yes, Sykes EnergiProjekts Limited has been in existence for at least five years, but Sykes as a company has existed for over 20 years. It was previously known as Sykes Holdings & Investments Limited, but after restructuring, it became Sykes EnergiProjekts Company. So we have been in business for over 20 years. It was registered in 1990.
Q. What other major oil and gas projects is Sykes EnergiProjekts Limited popularly known for?
A. We’ve been involved not just in petroleum tanks farm construction but also in complete engineering works, refurbishment of systems, plants, popular jobs, industrial projects appraisal, gas plants, amongst others. So we are a complete engineering company, not necessarily oil and gas services company. Therefore our activities cut across all sectors of the industry.
Q. Considering the poor performance of Nigeria’s fabrication and steel companies, how do you source the materials for most of the jobs you do?
A. Definitely our steel companies are functioning at very low capacity, and the ones that are performing are producing only structural steel. So the industry of metals and non-metals don’t exist because those who are supposed to be involved in metallurgy as an industry, those who are most technically engineering wiz-kids have chosen to be working in banks, financial institutions and so on. And so the core engineering has been abandoned for this other areas that appear to them very lucrative today, and of course the government too has not taken science and technology as the bedrock of development. As such, we came to be dependent on the oil companies and even countries like India among others, previously known as third world countries as Nigeria. Even other countries like Afghanistan, Qatar, Turkey, Brazil, Pakistan, even Dubai…; we bought every thing from them; that’s the level of our development, or do I say degeneration. The military people messed up the flow of development in the early 80s with the destruction of Shagari’s blueprint on technological revolution. You can remember in the 80s, during the establishment of the University of Science and Technology, dedicated for high level development manpower. But today, interests have shifted to the learning of such courses like fine arts, economics, law, business administration and what have you. So the industry that could have been given attention was left to its own fate. And so, because it is in this state, we will continue to rely on foreign manufactured products.
Q. Apart from all these you’ve mentioned, what other critical challenges should be addressed to bring about the much needed revolution and sustained operation in the industries?
A. I think one of the critical challenges in the oil and gas sector as well as other sectors too is manpower, or human resources development. Of course we are already having problems in the technical areas of our development. The oil and gas industry is basically, in terms of capacity, far from the mark. Our school system is weak and dead. But thank God Covenant universities and some other institutions are coming up to revive our school system. We see parents go to write exams for the wards in secondary schools; that’s also the level we have gone. So, it is a complete reorientation of our people and society; that’s all that we need now. Reorientation from get-rich-quick syndrome, reorientation from massive corruption, and reorientation from money as a means of measuring demand and supply, even our cultural values, because they are virtually collapsed 25 or 30 years ago. So what we need to do is to go back to the drawing board and start all over. The government of President of Goodluck Jonathan and the so-called governors, so-called because of the manner and method of winning elections, all national assembly members, all of them should go back to the drawing board for reorientation for real development to take place. With industry, you are creating a place for science and technology, and with science and technology, the oil and gas sector will automatically gain from it. But when the schools are dead, and the school system is dead, it will then take us obviously very long time before we can get back on track.
Q. I guess petrol tanks farm is usually sited in areas where there are seas or rivers and or waterways capable of taking light and heavy vessels. Lagos is a glaring example, but places like Imo State, such projects may require huge commitment to achieve such operation. Or you have a different view sir?
A. Basically tanks farm is supposed to be built in areas where there is oil. Right now, the network of pipelines from the refineries to other parts of the country is not as effective as it should be. It also does not cover as much distance as to touch all the crannies of Nigeria. And as such, for you to send products to remote areas, like Adamawa or Sokoto, it is difficult because they don’t have extensive pipes covering those areas. The best you can do for now is to use trucks, and in that case, such farms ought to be concentrated where you have access to the ocean, and so, vessels can bring products from abroad or from the local refineries. Take Imo State for example. If the Imo River is properly drenched and deep enough to take some flat cargoes, then it can attract farms coming to that area. For example again, a place like Onitsha and Asaba, South-east and South-south cities, if the river is properly drenched and big enough to take vessels, then badges can come to those areas, even if they have bridges, they can go under the bridges and take products to places like Onitsha, even as far as Benue. But the rivers must be properly drenched to take light badges to take products. So there’s a challenge for in-land tank farms across the country.
Q. There is enormous problem therefore because the refineries are so weak to perform continuously and optimally. Or you have a way out of the dilemma?
A. I think the government is already working in that direction and sincerely too. The refineries must be privatized, but government must relax the rules to accommodate such conditions as put forward by the potential investors – foreigners and some local petroleum marketers; most of them are ready to venture into Greenfield refineries. Again, the operation of the Nigerian National Petroleum Corporation, NNPC must be specialized, prices must be liberalized, and government must ensure that prices, plus the overall industry activities are guided with effective administrative regulation.
Q. I guess you import between 70-80% of the materials for most of your jobs, and the cost is almost always high. How does cost affect your bidding and production?
A. Well it is the function of dollar rate. But right now, there’s nothing we can do about it.
Q. And the banks are not always willing to give the much needed loan?
A. The banks are commercial ventures. They are there to make money. They are not interested in what you are importing. They are only interested in how much you are collecting and how much you are paying back. The onus is in the hands of government to bring out sound policies that will encourage local manufacturing. And for them to do that, the first thing government is expected to do is not even power, it is corruption…, the ability of government to eliminate corruption by a reasonable margin, then the power sector will consequently come to life. When you have stable in Nigeria, you will definitely have all the industries in Nigeria working. When it is efficient, the local people can now go into the production of small steel plants with power to function optimally, and then, we will be able to recoup our capital investment and possibly make profit.
Q. There are consistently occasions sir that customers borrow money from banks without committing that money into the projects for which it was given…
A. The reason is clear. Most of the banks are involved in shady deals and as such they compromise their positions. If you have a strong agency of government that can tackle corruption, this problem will be eliminated in a very short period of time. If you have gone to the bank to borrow a certain of money for a certain project, and at or during the transaction the bank official has not in any way compromised his or her position, there is no way the bank will not monitor the project diligently. But most bankers are corrupt that when Mr. A goes to borrow money from bank B, they divert the money to other things and the banker does not raise an eyebrow because it is the same corruption. It is not just in government circles, but also in the private sector; so every thing is coated in corruption and corrupt tendencies and proclivities.
Q. I also guess that Sykes is 100 percent local content company?
A. Yes, it is 100 percent local content, although about 60 –70 percent of equipment and machineries are foreign components. The local content is like manpower and civil materials, but basically equipment and machineries are all foreign components, so they make up the 60-70 percent of our portfolio, like I said earlier. Until the day when some of us will be involved in making our own made-in-Nigeria pipes and made-in-Nigeria turbines, then the country would have been placed in the right pedestal.
Q. How soon do you see that coming to fruition?
A. We pray that the government still in place now can help to instill discipline in the leadership of this country which will encourage some of us who are engineers, and even those who are not engineers to be involved in this local manufacturing of these things. Some years back, we used to know some companies that were into local fabrication, but they were virtually frustrated out of business. They were making these three-wheeled automobiles, almost 90 percent, but because people make money from importation, they have to abandon the project. And poor government policies are fast accelerating decay of the industries; I am not going to take the risk of doing until when I am sure there are good policies that will guarantee recovery of capital expenditure after about five years of that investment. So, every thing still goes down to corruption.
Q. Yes corruption, but which other practical way can government assist our local engineers?
A. If government can put policies, enforce rules and regulations, afterall Nigerians are not lazy people, we will be able to get there. Remember during the civil war, Biafrans were making armored tankers, and they were also producing petrol to run the war. It was after the war that every body started importing petrol; so, we have to go back to the drawing board; afterall we have the Nsekwe’s and other professors in the universities that can do it, and they are scattered around the schools. Once corruption is wiped out, or even to some degree checked, our educational system will clean itself up, and once it is cleaned up, the products of the schools will come out looking for jobs to do, and we will in the process create the entrepreneurship that will go into manufacturing and fabrication, and we can now be self dependent, to a large extent. One basic truth is that corruption makes every thing unsustainable. So, even if there is power, it will not be sustainable because corrupt practices are high and cannot be addressed.
Q. What other major projects is Sykes Energi looking forward to do in the very near future?
A. Well, Sykes is into the downstream of oil and gas industry; we are moving into the upstream gradually. But basically, we’ve been in petroleum tanks farms as pointed out earlier. We are also looking forward to going into production of the things we use in our construction like electrodes. You know that most of the electrodes manufacturing companies are gone because of power problem. And these are the companies that would have created employment for thousands of our people. So we are looking at backward reintegration; going back to the root to see what we can do to revive the industries. Yes, either revive them or build new ones. We are looking at gas for our jobs; we need a lot of gas. We want to see if we can tie into gas production. We are also looking at basic safety tools such that can grow over a period of time. In the next years, we are looking at local content that will be sustainable, but we pray that the government policies we are already looking forward for will also be sustainable. But if we should have a leader who comes and carries “agbada” (flamboyant attire) about and reasons like a fool, then the grave for the Nigerian future is already prepared, because the problem will continue indefinitely.
Q. If by the next few years sir electricity generation and distribution has not made any significant shift at least positively, what happens to your operations?
A. We may not be able to move forward if government continues to pay lip service to corruption and power. Probably I will move down to my village and start farming. I know that if I get to my local government and demand for land for farming, I am likely to get it. But then, if corruption has so deepened that the local government authorities would want kickbacks before any favourable action is taken, well, that is where the problem will lie.