Welcoming new ideas and technology in Nigeria
Jerry Uwangue, managing director of J&G Engineering, and Gina Uwangue, the company’s executive director, talk to The Energy Year about the company’s main activities, strategy and goals in the Nigerian energy industry. J&G Engineering is a Nigerian provider of engineering design, project management, construction and maintenance.
What are J&G Engineering’s main activities in the Nigerian energy industry?
Jerry UWANGUE: We are an engineering company whose core values are integrity and technological advancement, which we pursue while being client-centric. We are also ISO 9001:2015 certified. Thanks to these values, we have been getting lots of recommendations, and we are gradually growing our portfolio in Nigeria to spread it across other African countries. By doing so, we want to soon be a reference in the Nigerian oil and gas industry.
Together with Cakasa, we are providing civil works on the tank foundations for the Port Harcourt Refinery. We are also interested in working on the pipeline construction for the Dangote Refinery.
We own a fabrication facility in Port Harcourt. We also have registered interest in owning an assembly plant where we can assemble unfinished products in Nigeria. We are waiting to find out which land we can use, and once this is operational, we will be able to partner with OEMs around the world and bring their products to Nigeria. We have expanded our network into the marine sector with the goal of owning vessels, barges and security tugboats. Regarding security, we are communicating closely with NIMASA [Nigerian Maritime Administration and Safety Agency] to secure our waterways.
How is the company positioned in the Nigerian refining sector?
JU: The government is revamping every refinery it operates in Nigeria. We are involved in the Port Harcourt Refinery revamp, and they have pressured us to work day and night because they want it up and running quickly. The government means business, and they want substantial results. Therefore, we must complete our contracted works by August 2022, which will take some effort from our side.
Works on the Warri and Kaduna refineries are still in the bidding process, and we are watching closely as we plan to support winning bidders. Most of these companies are international, and thanks to the efforts of the NCDMB [National Content Development and Monitoring Board], they will have to partner with a local player. We are well-positioned to be the partner of choice for any project related to the refining space in Nigeria.
What do you see as the main challenges in the Nigerian energy industry?
JU: Nigeria’s bidding structure needs to be streamlined because, as it is now, it is inefficient and highly time-consuming. There is also an apparent asymmetry between the price you bid for and the price you get once the contract is awarded. The government is called on to optimise the tendering process by considering inflation and Nigeria’s unstable financial situation. The timeframe should be shorter to be less exposed to external economic shocks that might affect the contract value. Crude oil prices are extremely high, and to fully benefit from them we need a more supportive environment for the contracting cycle.
Another major challenge lies within our regulatory agencies. There are too many regulatory bodies in the Nigerian energy industry, and we should merge them into one single organisation.
How is J&G Engineering managing to be financially stable?
Gina UWANGUE: Over the years, we have built our capacity, track record and reputation with the banks. We have never defaulted on our loans. We have always serviced them and paid them back when due. This gives us access to the banks as a priority company; whenever they see us, they are willing to invest thanks to our reputation and trustworthiness.
The NCDMB has significantly assisted us via their local content fund. It is entitled to 1% [of the contract value awarded] of every project conducted in Nigeria, and that sum is saved for companies who have shown a willingness to grow. Through this, we have put ourselves before them as one of those companies with the foresight and potential to showcase Nigeria.
What kind of cost optimization strategies are you currently providing?
GU: We try to provide the lowest overhead costs possible and available in the market. We have pull-off staff that we deploy only if contracts are available. We ensure that we keep our expenditures relatively low and always watch the books. We also have a credit line with several banks, and we have built a flat rate that gives us an advantage over our competitors. Considering all these factors, we have a significant competitive edge in the bidding processes.
What role do digitization and technological advancement play in your business strategy?
JU: Nigeria is one of the fastest-growing countries for technology, and it has one of the largest pools of investors. We know that new technologies are coming out, and we work around the clock to ensure that our activities meet today’s demands for advanced technology. The only way we can achieve and sustain that is by constantly educating ourselves – going for training, being open to new ideas, welcoming new challenges and seeing how we can navigate through them. We also develop our in-house know-how by employing young engineers.
How is J&G Engineering supporting the Nigerian energy transition?
JU: What we put forward is welcoming new ideas. We are willing to learn, develop reasonable trends, and see how they will fit into our businesses. The global energy scenario is changing, and we don’t want to be left behind. We are in touch with French investors willing to support us by establishing solar-powered modular refineries. There would be no need to flare gas, and they could be placed anywhere.
In the oil and gas space, we have seen a higher need for water treatment services, and we have already branched into that by launching our water treatment optimization project. All of the water we release into the sea must be treated first to avoid causing any harm to our ecosystem.
We are also working for NLNG, a milestone project for our country. We are already positioned as one of their energy vendors. Seplat is taking over ExxonMobil’s assets and will shift its focus to gas; we want to be positioned to take over possible projects with them.
What is your regional expansion strategy?
GU: We are looking for opportunities to expand into Angola and Uganda. We plan to provide technology transfer to these markets by partnering with local companies. We have realized that our fellow African companies prefer to partner with other African companies instead of international players. In Angola, we plan to focus mainly on pipeline construction. We will establish a fabrication facility there which will enable us to fabricate, install and provide pressure testing for pipelines.
Where do you see the company in the next three years?
GU: We will be one of the leading oil and gas companies – not just in Nigeria, not just in Africa, but in the world. Flying the Nigerian flag high, we are looking into having our own oil block in the next five years. We are seeing how we can put together a group of partners and foreign investors. IOCs will sell off their assets, and we must be ready to buy into one. We plan to have J&G Group structured with several subsidiaries spread across our various operations.