Can you tell us about the company’s performance and recent activities?

MO: It has been an evolving period for Eraskorp, an industrial and infrastructure conglomerate. The business environment has been challenging, and the most significant issue remains local financing. We experienced excessive delays in the release of our project funding by the bank. This delay impacted our timely completion of critical shoreline protection works, allowing river flooding and erosion to wipe out the shoreline and damage part of the factory building of our ongoing lubricant and chemical blending plant construction at our 50-hectare Industrial Park. 

There is hope with the current government, which aims to increase production and encourage greater Nigerian participation in E&P. There has been a positive shift with local players getting more involved through divestments, but regulatory oversight is crucial. If divestments are not adequately managed, service companies like ours may struggle, particularly in infrastructure management. In the past, we have seen local players set up service entities internally, eliminating transparency in procurement, which negatively affects overall industry performance. To ensure success, there must be fair competition. Additionally, regulatory bodies must focus on community participation, equity involvement, and energy security during divestments. Without community involvement, pipeline insecurity will remain a significant issue. 

SO: Over the last year, things have become significantly busier for us. One of our key projects is with Shell, where we handle plant Facilities Maintenance, Engineering & Project Support Services, including electrical, instrumentation, mechanical and Civil interventions. This is a multi-year contract, for tasks such as power generation systems maintenance, fabric maintenance, electrical equipment, switchgear, motors, pumps, compressors maintenance, control system upgrades, vessels cleaning and facilities shut down support . It has been a hectic but successful year, and we expect the same for the next few years.

Additionally, we are involved in pipeline intervention repairs and construction, and tanks fabrication, and the industry is picking up pace.

Can you speak on the financing ecosystem in Nigeria for infrastructure projects?

MO: Many Nigerian banks are not structured to support businesses effectively. Instead of enabling growth, many operate like competitors. It is common to see banks diversifying into the same industries they are supposed to finance. This kind of financing ecosystem is problematic, as it delays project execution and increases costs unnecessarily. The gap between funds disbursement and project execution often results in financial strain, making it a challenge to meet project deadlines. Banks are also very cautious with oil and gas financing due to past failed projects. While their caution is understandable, it creates significant roadblocks for businesses looking to scale. Government intervention is needed to establish better long-term project financing. The NCDMB has been providing some support, but its funding capacity needs to be expanded to allow more businesses to compete effectively.

Can you comment on the impact of the Petroleum Industry Bill on pipeline security?

MO: The current pipeline security operators have done a great job exposing oil theft operations, including large-scale illegal refining and offshore smuggling. However, our experience on the gas side is alarming. During a recent inspection of a condensate pipeline, we found over 100 illegal tapping points. This is extremely dangerous. Unlike crude spills, a condensate gas leak can cause massive explosions. The government must immediately extend the security measures applied to crude pipelines to condensate and gas pipeline infrastructure.

What is your outlook for the coming years?

MO: Nigeria is moving towards a significant increase in oil and gas production. With local companies acquiring onshore assets, I see a renewed commitment to increasing output. The heft of recent investments suggests that these new asset owners are willing to invest heavily. Combined with the government’s efforts to secure pipelines, Nigeria is on track to boost production significantly. For service providers like us, this presents a significant opportunity for growth.

SO: When new asset owners take over, they must deliver results for their investors, which means aggressive investment in maintenance and production increases. Every oilfield declines without continued investment, so these new owners must push hard to restore and increase output. This means significant opportunities for contractors like us in the form of asset upgrades and new projects. On a larger scale, the industry is moving towards more activity, and we expect a busy few years ahead.