Featured, Interview
- What we are Doing to save Nigerian Refineries
- Non-passage of PIB is Killing Nigerian Economy
- Why Stakeholders are hindering passage of PIB
- We encourage Whistleblowers at NETCO
Siky Aliyu, chemical engineer, was not a novice in the oil and gas industry when he was appointed the 11th managing director of the National Engineering and Technical Company Limited, NETCO, on April 1, 2016. He came armed with more than 32 years of experience as a player in both the midstream and downstream sectors. This cognate experience clearly aided his understanding of what needs to be done to revitalise a near comatose NETCO to become a profit making organisation which now pays dividend to its parent company.
The first thing Aliyu did at NETCO was to clear about three years’ outstanding annual general meetings, AGMs, in three months. “We needed to tidy up the books, get the financial statements done and get the AGM done. I mean, when I came in 2016, the AGM for 2013, 2014 and 2015 were outstanding. So, that was the first thing I focused on to clear,” he said.
Having cleared the backlog, Aliyu concentrated efforts to make sure all the engineers in NETCO were gainfully engaged. Today, all the engineers are fully engaged compared to 53 out of 300 engineers who had no projects assigned to them in 2016. The big thing about Aliyu’s turnaround of NETCO is the hefty dividend of N610 million which it paid to the Nigerian National Petroleum Corporation, NNPC, recently. He hopes to surpass that in the financials which NETCO will present at its AGM soon. Unlike other subsidiaries, NETCO is no longer collecting subvention from the NNPC.
The NETCO managing director is equally a man of many firsts. A graduate of Chemical Engineering from the University of Newcastle Upon-Tyne (U.K.) in June 1983, he joined the NNPC in November 1983 as a process technologist in Warri Refinery and Petrochemical Company where he worked until December 1989 when he was seconded to Nigeria Liquefied Natural Gas, NLNG, as a Senior Process Engineer.
While in NLNG, he was involved in all aspects of the company’s projects development and implementation from scouting studies, to Basis of Design to Front End Engineering Design, Detail Engineering, Commissioning, Start-up and normal plant operation. He was the first Nigerian in the NLNG to lead process engineering group as Lead Process Engineer and in 2004, he became the first Nigerian to be commissioning manager for NLNG Plus (Trains 4 and 5).
In 2006, Aliyu was appointed Technical Services Manager, the first Nigerian to occupy the position. In that position, he led a team that championed many initiatives which saved more than $100million for the company. Top amongst these initiatives are Flare Reduction Initiatives, which successfully reduced operational flaring from three percent to 0.5 percent of feed gas intake and the Optimisation of LNG trains and Gas Turbine Generators during gas supply shortage situation.
In February, 2010, he was de-seconded back to the NNPC as manager in charge of the Gas Processing Facilities in Gas and Power Directorate. Later that year, he was deployed to Brass LNG as a Shareholder Subject Matter Expert in LNG to assist in evaluating the Technical and Commercial EPC bids received from contractors bidding for the Brass LNG Project.
In 2011, Aliyu was promoted general manager Brass LNG where he provided overall direction and management of operations of the Brass Facilities division supervising the Basis of Design, FEED and EPC Contract negotiations and contract conformance of mega billion Dollars Brass LNG Onshore Works, Offshore Works and Gas Train Engineering and Procurement Contracts. He also led the initiative for further optimisation of the Project to reduce Capex.
An alumnus of INSEAD Business School and member of Board of NETCO-Dietsmann, he was also a member of Council and Board of Directors of Nigerian Society of Chemical Engineers from 1991 -1996.
An author of a textbook The Chemical Engineering Problems – Vol. 1 Separation Processes published in 1989, Aliyu is married to Oluremi, a consultant Internist, Occupational Physician and they are blessed with five children.
Aliyu, who is also a golfer, loves reading, meeting people, mentoring and coaching. The NETCO managing director made time out of his busy schedule to grant an exclusive interview to Maureen Chigbo, editor, Realnews and Samuel Ibezim, reporter. He speaks on topical issues in the oil and gas industry, lingering fuel crisis, why the National Assembly must pass the Petroleum Industry Bill speedily and how he made NETCO to become profitable in less than two years of assuming office. Excerpts:
Realnews: You have been in the saddle for the past two years. How has it been working as the managing director of this great organisation?
Aliyu: It’s been a very interesting journey and I think I’m pretty blessed to have come out here. Like I will always say NETCO is endowed with experience, rich in skills and a lot of people who currently work in NETCO are very well groomed. Not only that, NETCO has produced a lot of engineers for the industry over the years. So, I came in really to meet a crop of people who are top professionals. So, I am very pleased to be here. But there were a lot of challenges when we came in. There are a lot of things that are outstanding. There are a lot of things we need to kind of plan immediately. Things we can do on the short term. What can we do on the mid-term and then of course, what is the long term plan for NETCO?
Realnews: Can you tell us more about the things that needed to be done?
Aliyu: When I first came in, of course, there were about three years of outstanding annual general meetings, AGMs. So, we needed to tidy up the books, get the financial statements done and get the AGMs done. So, that was the first thing I focused on to clear. One of the other challenges we had was that we were not getting a lot of jobs. We had a lot of people but we had few jobs. So, what I did was to make a presentation to the top management of NNPC during a retreat when our honourable minister of state for petroleum was still the GMD. And I made a presentation really telling them very clearly that they needed to support NETCO. We cannot be in our mother’s kitchen and all we get is bones. We needed to also be part of the company that are patronized. They need to really be committed to grow their company because we have quite a number of companies that we compete with; the likes of DeltaAfrik, IESL, Crestech and Amazon. Though we have quite a number of engineering companies and they were even getting more jobs than NETCO. As at the time I came into NETCO, we have over 300 engineers, but 53 were just sitting down collecting salaries because there was not enough job and I couldn’t lay them off because there was a clear embargo on recruitment and also government was not laying off people. So, for me, the first thing I did then was to say, look, we need to get more jobs. Shortly after the presentation, of course, the current group managing director of NNPC, GMD, came in and he was an alumni of NETCO. He started from NETCO and he understood exactly what it means to be in that position and the first thing he did, after the presentation to him, was to commit to domicile all the pre-front end engineering designs in NETCO and he has actually been very supportive of NETCO. With his being there, he has given us a lot of opportunities to compete for a number of jobs. As I am talking to you now, there is no engineer in NETCO that is not on one project or the other. So from 53, non-assigned to zero non-assigned. So, that for me is a very big achievement. Not only that, the kind of patronage we have been getting from NNPC, we have been doing quite a number of NNPC projects. We have gotten NNPC support also to increase our IOC project portfolio. So, we have quite a number of jobs. We have grown the profit, we have grown the revenue and for first time in many years, we paid a lot of dividend to NNPC four years totalling about N610 million. We are just rounding up our financial report for 2017. The plan is to have our AGM in the first week or second week of April at the latest. And of course, the books are looking good, we are looking forward to declaring even more profits.
Realnews: Can you give us a snippet of what to expect in the financial report? Is it going to be another bumper dividend for NNPC?
Aliyu: Yes, it will be a bumper dividend. I cannot give the figure yet without first talking to my principals. We have to have a board meeting where what goes back to NNPC in terms of dividend will be agreed. We will make substantial profit and I am quite pleased to see that the kind of support that we are getting is yielding fruits. And you know, what this tells you is that NETCO has huge capacity. If it is supported, we can go places. R ight now, we are the number one engineering company in Nigeria. We are the oldest engineering company in Nigeria. But what I am really trying to do and what I have done over the last two years is to position NETCO in such a way that it can be the go-to engineering company in Nigeria. And it is possible, it is doable. We have the resources, we have the experience and we have the capacity and the capabilities to do that.
Realnews: Do you work for IOCs (International Oil Companies)?
Aliyu: Oh yes, absolutely. NNPC is just one of our clients. There is hardly any IOC that we are currently not working for. We have projects from all the IOCs that we are working on and as we speak now, I mean we are on eight floors; you know, six of the floors are project floors and different people are working on different projects that belong to the IOCs. So, we are actually executing the projects right here as we speak.
Realnews: So all the fabrications are done here?
Aliyu: No we don’t do fabrications. We do full engineering design. And then, we have also migrated from doing engineering to doing EPCM (Engineering, Procurement and Construction Management). So, we partner with other local companies to do construction management. As we speak now, we have an EPCM project that we are doing with ExxonMobil and that is going on very well.
Realnews: Can you tell us in a nutshell what NETCO does so that somebody who is just reading for the first time will have an idea of the operations of NETCO?
Aliyu: Alright. So, NETCO was set up traditionally to be an engineering company. And it was set up at that time almost about 30 years ago with Bechtel International, which is an American-based company and the intention is to actually grow engineering capacity in Nigeria in order to be able to domicile a lot of engineering activities in Nigeria. After about six years, unfortunately, there were not many engineering jobs at that time in order to actually make it work well for Bechtel to stay so they opted out. NETCO then became fully owned company of NNPC. and we were doing engineering work. But over the years, we realized that doing engineering work alone is minute in terms of the overall values an EPC contract. When I say EPC, I mean Engineering, Procurement and Construction. So, if you look at that, when you are talking about engineering, you are talking about doing the feasibility studies, the basis of design, front engineering design and then of course, the detail engineering. All that only constitutes about 7.5 to maximum 10 percent of an EPC contract. So, you can imagine of an EPC contract of a billion dollars and you are only looking at getting a maximum of a hundred million out of a billion. So, it is very little. In order to grow the company, we have to go just beyond doing engineering. So, we ventured into procurement and also construction management. We have expertise in-house. So, if we have an EPC project for instance, we collaborate with some local construction companies who would take care of the construction and NETCO would take care of the management of that construction. But we do the engineering, we do the procurement, and that’s what we have done and you know, we have been lucky we successfully executed about three EPCM projects and we are still looking for more. Not only that, one of the things we also venture into is operation and maintenance because one of the other areas of generating resources is to go into operation and maintenance. And we just successfully collaborated with two other local companies to get into the operation and maintenance of the Mystras FPSO which is owned by NPDC, one of the subsidiaries of NNPC. It’s offshore.
Realnews: Which are the two companies you mentioned?
Aliyu: So, there is JUBOB Keystone Engineering, they are Benin-based and then there is Pivot GIS. We kind of collaborated with the two companies and for the last six months, almost, we have been doing the operation and maintenance of the Mystras FPSO.
Realnews: How is the competition in the industry and how are you able to cope because you have mentioned other big companies? Are they local companies or foreign?
Aliyu: No. All the other companies I mentioned earlier on are Nigerian companies working in Nigeria. One of the things NETCO also does very effectively since I came in is, I realised very quickly, at the time we came in, the crude oil price was very low and there were very few projects. A lot of projects that ought to have started were shelved. So, there very few projects and you see a lot of people, a lot of engineering companies filing after very few projects. So, what we did when I got into NETCO was to call all of them together and said we can collaborate. So, there is no point for so many companies running after very few, and what that does for you because the competition is very stiff, people started bidding extremely low for projects and of course, even if they bid very low for this project, we know at the end of the day, they will not be able to execute it. They will come back with series of change orders but you know, in line with procurement act, you have to give it to the lowest bidder. And if you give it to the lowest bidder and he takes it, once he has put his legs in, you can’t take it away from him and then he comes out to start giving you all sorts of reasons why he cannot finish the project. So, what we did is that for quite a few projects, we collaborated. I said okay let us work together. Bring out your resources, we will bring our own resources and we will work together and we collaborated. We did that very successfully with EGINA FPSO (floating production, storage and offloading vessel) which is owned by Total and we did that very successfully, NETCO led that. And we also did it now for Bonga South West/Aparo which belongs to SNEPCo (Shell Nigeria Exploration and Production Company Limited). We just finished their front-end engineering design, so we collaborated also with a few of the engineering companies and we did that together, okay? We are also collaborating on NLNG Train 7 FEED that is comping psoon. So, the intention from NETCO is not to take the job away from other competitors but to also see how we can collaborate with companies. As we collaborate with Nigerian companies, we are also collaborating with international companies. Currently we are collaborating with Doris Engineering of France to execute some of the projects on Total Ikike Project, it is a flow station and we are currently doing that together right now. We also collaborated with KBR (Kellogg Brown & Root) to do some of the refinery activities that we are currently doing for NNPC. So, we are collaborating with few engineering companies outside of Nigeria where we have resource gaps.
Realnews: You have been in the industry for a very long time and we have had problems with the refineries and here (NETCO), you have first class engineers. What is the problem? Why can’t the engineers do the turnaround maintenance of refineries in this country and get it very well done because most of the things that have to be done there are also engineering work, if I get it correctly?
Aliyu: Yes, it is true. I started my career in the refinery. Today, Nigeria has some of the best refining skills in Africa. The people in the refineries can make the refineries work. They can make it work but you do not make the refineries work with your mouth. You make refineries work by supporting it and making sure you fund it and you do it right. In the days of old when I started my career in the refineries, nobody used to hear of turnaround maintenance. It was done in-house, programmed, planned, executed and there was always enough funds made available to have this job done. But I think somewhere along the line, it became politicized and a lot of fraudulent people were showing a lot of interests and people that had no business in refinery suddenly became refinery maintenance contractors and of course, that is one of the issues. But having said that, take politics out of the equation, in the last 20 years, we have been having serious challenges of getting available crude oil into the refineries. So, if you don’t have crude oil coming in, you cannot process no matter how best your engineers are, you cannot operate the facilities if you don’t have the feed that is coming into that facility. I am sure you know over the last 20 years we have been having vandalisations of all the pipelines that bring crude into the refineries. It wasn’t just the crude pipelines, even the product pipeline that takes the product from Warri and Port Harcourt to the different areas, to Mosimi and to the north and the rest, and all these pipelines have been vandalised multiple times. So, even if you have the people to operate the refineries and you don’t have the crude to process, it is useless. You cannot do anything but you know, the current government is doing a lot of work in trying to revive the culture. Now, of course, those refineries have been there for decades, so, they need to kind of rehabilitate them and right now, the COO (Chief Operating Officer) Refinery is working very hard; he has gotten the approval of both NNPC management and the presidential approval to find people that can come and help to get the refinery back to what they used to be. So, they are going back to the original refinery builders to come in and really rehabilitate all the four refineries that we have in Nigeria and that is going on and they will not be working alone, they will also be working with NETCO and few other companies to really get it going. The intention is that once that is done and hopefully, we will get some things around the pipeline. As we speak now, we are also re-designing the pipelines. We are also trying to work around to see if we can put in new pipelines, or both crude and product. So, we are currently as we speak, doing the feed, the front ended engineering design for both the crude and product pipelines in order to guarantee that we can actually be able to get the crude to the refineries when they are fully rehabilitated.
Realnews: Okay, would there be adequate security to protect the pipes from the vandals?
Aliyu: Well, there are two aspects of it. There is the engineering aspect which we can deal with and we are doing. And then there is other aspect of actually engaging the communities, engaging the people to ensure to ensure pipelines are no longer vandalised. One of the things that the government is doing, I am sure you have heard of modular refineries, where they will locate modular refineries, close to the major refineries and they would be owned by the locals. You know, so, hopefully, with that kind of buy-in, they would keep the locals busy operating the modular refineries and hopefully, they would allow the pipelines to ferry crude to the refineries uninterupted.
Realnews: Do you see the modular refineries as something that could check pipeline vandals?
Aliyu: Possibly, because now, they own it. They will be the part owners of the modular refineries. They will also be working to make sure it works so it can generate funds for them equally. So, once they are busy doing that, and they are happy doing it, I see no reason why they will like to continue to do any kind of vandalisation of the refinery pipelines. Yes.
Realnews: How has the national content policy helped NETCO?
Aliyu: It has helped NETCO immensely and I must be honest with you, both the past and current executive secretary of NCDMB (National Content Development and Monitoring Board) are very committed gentlemen. They really walk the talk. They got involved in every project to ensure that nobody violates the Nigeria Content Act and what that simply means is what can be done in Nigeria must not be done outside Nigeria. So, what that then tells you is that, and if that is to be done in Nigeria, it is the local companies in Nigeria that can do it, and even where local companies in Nigeria do have resource gaps or skill gap, they can bring the expertise they require here to Nigeria to work with Nigerians to execute these projects and the man-hours that are used by those experts that are coming into Nigeria will be counted as part of the Nigeria content hours because they are now domiciled in Nigeria, executing it in Nigeria and that for me is a lot you know, so you see now, unlike in the past, once you sign it, everything is taken out. They go and do their front end engineering abroad and it is at the tail end when they are about to start construction, they start coming. That’s changed. The Nigeria content is very clear. You must execute all of them in Nigeria for FEED. The only exception is for things like LNG (Liquefied Natural Gas) or areas which require certain proprietary or specialised skills you cannot bring in, then they give you a limited time to do that proprietary design out but you must immediately relocate back to Nigeria to finish it. Yes, it has helped dramatically in trying to improve the growth of the local engineering companies. It has helped in increasing the capacity and the competence of Nigerian engineers because now, they do the work here and you can see, of all the projects that have been executed since the Nigerian content act was signed into law in 2010. Prior to the time it was signed in, there was the NNPC Nigerian content division which was also seeing to it that that was happening. But I can tell you that since that time, up till now, a lot of projects have been executed in Nigeria and a lot of Nigerians have been involved in executing these projects. So, we have been able to basically build capacity in Nigeria for a number of projects.
Realnews: So, signing that act into law was a very good thing?
Aliyu: Yes, absolutely. It was the greatest thing for Nigerian engineering companies.
Realnews: But the IOCs don’t seem to like the law?
Aliyu: I do not think that they don’t like it. All the IOCs require is that they want the job to be properly done. They want the job to be properly manned and once they have the conviction that you put the round peg in the round hole, they will support it. I mean look at what Total did. Total has been doing extremely well. I mean on the EGINA projects, we recorded over one million man-man hours done in-country. That was a great support. I mean look at the OFON they did, it was also done in the Niger dockyard; thousands of Nigerians were involved. That for me is a sign of commitment. And it’s not just Total, quite a number of other IOCs are beginning to ensure that this happens. They are okay as long as you have the right resources. They only have a challenge if you don’t have the right resources and they have to redo the work and once they redo the work, it costs you more money. And then of course, you blow your budget. So, that’s really the concerns they have, but right now everybody is getting involved in actually checking out right from the get go once you start the mobilisation of the resources you require. They ensure that they look into those resources signed off from them that these people are okay, they can do it. And if they have challenges along the way, they change them.
Realnews: One of the key issues in the industry is the PIB (Petroleum Industry Bill) that has not been passed although they have passed PIGB (Petroleum Industry Governance Bill). How is this affecting the industry?
Aliyu: It is affecting the industry tremendously. PIGB is just a governance bill. It has not addressed the fiscal aspect of the bill and the fiscal aspect of the bill is what will allow the IOCs determine whether they want to invest in country or they want to carry their money to another country to go and invest. They have to look at what the government is giving them? What are the the conditions under which they need to invest, for them to be able to see what their return on investment would be, and then, they can check what they are getting in the other parts of the world to see whether it is something they want to do or not. As a matter of fact, by not passing the PIB, I guarantee you in the last 10 years, we have lost tremendous opportunities for Nigerians.
Realnews: Can you give an estimate of how much we would have lost?
Aliyu: It’s huge because a lot of projects that they wanted to do been shelved. They have been shelving hose projects because they want to know what the fiscal regime is. What are the taxes that would be slammed on them? What are the other things they need to commit to? And you have to put all these in your projects economics before you check what your profitability is and then determine what your return on investment would be. Without getting out those things or where all those things are, I doubt, you cannot commit huge financial resource and for that reason, a lot of projects that would have happened have been shelved. They just say – wait let’s see where they are going with this PIB.
Realnews: Would it be right to say that investment in the industry is declining because of the non-passage of the PIB?
Aliyu: Absolutely, absolutely, and absolutely.
Realnews: And Nigeria is the loser?
Aliyu: We are the loser because we don’t have the money to do these investments. We need these people to bring the money in and once they bring the money in, they invest, we keep people busy. People are in employment. We are able to employ so many people. Look at what they did in Nigeria LNG? Look at the number of people over the years that were recruited to execute that project at the time, the peak was 10,000 people working on the island and look at what it has generated for the country over the last how many years that it has started. So, for me, delay in investment decision has ripple effect on the economy of the nation. So, it is high time this bill was passed and put to rest. So, everybody can then look at it and then say – okay, what does it say? Now, I am okay with it, let me come and invest or I am not okay with it let me take my investment somewhere else. But at least, let there be clarity, let there be certainty as to what the requirements are if you are investing in Nigeria oil and gas industry.
Realnews: What do you think is the problem why this bill is not passed because successive governments have tried and at the nick of time, they will just back out. There is also this idea that IOCs are the ones fighting against passing the bill the way it is?
Aliyu: There are a lot of permutations. There are lots of, you know, suggestions and people are just coming out with all sorts of excuses as to why it is not passed. The problem is there are so many stakeholders and every stakeholder wants to ensure that they are taken care of. IOCs are one of the stakeholders, the communities are one of the stakeholders, and the government also is a stakeholder. So, there are so many stakeholders and everybody is looking at how this bill is going to affect them individually and collectively. IOCs are looking at how it affects them. If you put all these levies in, it is going to reduce their return on investment. So, why should they come and invest? Why do you want to tax them? They have been enjoying, you know, reduction in taxes for many years. So, when you are used to doing something over and over, and somebody wants to take it away from you, the natural thing for you to do is to resist it but then, what Nigeria is also doing is not just from nowhere. They have gone all over the world to see how it is done elsewhere and they are trying to bring all those best practises in. There are certain things the IOCs are getting away with in Nigeria that they can’t get away with in other countries. And these are some of the things that the government is trying hard to do to ensure that, I mean, whoever asks for equity, let him come with clean hands. And you will still benefit and the country will benefit. The host community is also looking at it and saying what is in it for us? This thing that you are producing is coming from our community; are our communities better of? Give us something in it so that we can be part and parcel of it. So, there are so many stakeholders but it’s high time we put everybody together, understands the concerns of each and every stakeholder and then find a win-win solution that would be acceptable to all.
Realnews: Countries like Angola and rest of them that have passed the PIB bill and there was no so much resistance from the IOCs the way they are resisting it in Nigeria. Why?
Aliyu: The interesting thing is that if I know that I can browbeat you to be able to improve my lot, I will browbeat you. In any business, you don’t get what you deserve, you get what you negotiate. Okay? So, it’s just a matter of negotiation. Everybody is trying to get the best for themselves. I just told you that if you are really used to getting something, you are working for me, I am paying you a million naira every month and now, suddenly, I am trying to negotiate something you have enjoyed many years and I say to you, very soon, you going to start taking N500,000, of course, you are going to resist it. You are going to fight; you are going to see if you can go somewhere to find a job and if you can go somewhere else to find a job, you will go and get that job, you will not work with me. But there may be other things that may not want you to leave because you have invested so much and why will you just carry yourself and go? So, why don’t I continue to negotiate to get something better for me? So, it is a negotiation. You do not get what you deserve. So, everybody is positioning, Nigeria is positioning, the IOCs are positioning and they are negotiating but at the end of the day, you know, it is not a matter of waiting to see who will blink first. It’s either the legislators take decisive actions and say take it or leave it, this is it, we have passed the bill. If you don’t want to stay, you can go and if you want to stay, you can stay but I am sure the legislators that are also looking at it are not just doing it in vacuum. They are engaging every stakeholder to hear from all of them on how this bill is going to affect them, and take all their concerns into their deliberations and to come up hopefully with the masterpiece that will become a win-win for all.
Realnews: Do you think this bill can be passed anytime soon because it has dragged on over the years?
Aliyu: I think they have made some progress. They have passed the governance aspect. I read in the news in the last couple of weeks that by June, the PIB will be passed. We pray they will do it in the collective interest of all. Because, we will be better off if this bill is passed. I guarantee the IOCs will not leave. They will work around it and they will see what they can do to make it profitable for all. So, I think it is high time we passed it. It’s in our collective interest. You can imagine, I mean, if this thing was passed even 10 years ago, you can imagine the amount of investments that would have come into our country. You can imagine the number of people who are currently out of jobs that would have been working and you can imagine the ripple effect of that on all the people. So, it’s something we need to do like yesterday because very soon, this our crude oil that we are talking about, depending on what happens, now, everybody is talking about electric cars. If France implements it, America is spending huge amount of money on biofuel. If they do their own, at the end of the day, all these clamouring for oil and oil, the demand will go down. I saw in the paper recently where the minister of state for petroleum says we have lost our market share in US and if that continues for sometime, what that then means is that the demands for your crude oil crashes and the price will crash, where do you get money to invest in the economy? How do you grow the economy? The government is doing a lot of things to go into diversification; that is fine, but it will take a while for us to see the effects of that. We still need the oil money to inject into the diversification agenda and until we do that, it will be a very difficult task for us to do.
Realnews: So, it boils down to having the political will to pass the PIB?
Aliyu: Yes.
Realnews: You have achieved a lot in a very short time for an organisation that has been for almost 27 years before you came in and throughout that 27 years, if I get it correctly, they didn’t make any profit?
Aliyu: No, no and no. They have been making profits but in the last few years, the profit has become much better than what it was.
Realnews: How many years?
Aliyu: No, no, no. Let me tell you something about NETCO. One of the things that NETCO has done successfully within the years is trying to stay afloat. NETCO is a company where they pay their bills. We do not get money from NNPC to run the business. We generate revenues and then, we pay our staff, we take care of our overheads and then, of course, we still pay dividend to NNPC. The company hadn’t paid dividend to NNPC in a very long time but we have reversed that now and we are paying now. We‘ve been paying dividend from 2013 to date. We’ve paid a whole lump sum of N610 million to NNPC for 2013 to 2016. We will be doing the one for 2017 after the AGM (Annual General Meeting) in April. So, for me, the message to them (NNPC), of course, is that now, we are not taking subvention from you. With your support, we are self sustaining, we are profitable. Support us more so that we can be able to translate the naira dividend into dollar dividend for the corporation. And we are working on that.
Realnews: It couldn’t have been easy to achieve this?
Aliyu: Absolutely not.
Realnews: So what was the most challenging experience you had while trying to get the organisation after so many years of not declaring profit to become profitable and to even declare dividend?
Aliyu: It is to carry people along and to let them understand that a profitable NETCO is a plus for NNPC. A profitable NETCO will also add to whatever income NNPC is generating. And more importantly, NETCO belongs to NNPC. So, charity begins at home. Patronise your company before you patronise any other company. We are not telling you don’t give job to other companies, but patronise your own company and we are competitive. Okay, we do have some challenges, of course, in terms of our rate being higher than some other places and you can understand that. NNPC staff are very well paid. You know, the kind of salary they earn is not the same salary that other Engineering companies pay. So, if am paying that kind of salary, I have to be able to generate income to do it. So, obviously, my charge out rate on my personnel will be higher than charge out rate for others and that is actually the traditional challenge we always had because when we bid with these other companies, they say our rates are high and for that reason they go to the lowest bidder. So, what I have done since I came in is to crash the operating cost to really try to look at our billing mechanism. How do we bring the rate down and because we have a hybrid of NNPC staff and NETCO direct staff, we try to use a lot more of NETCO direct staff in executing the project. So, we can actually have a hybrid rate which is hopefully comparable to what we see in the industries in the other organisations. The second thing that really helped is the commitment of the top management of NNPC. The GMD is a strong supporter of NETCO. The GMD believes that the company, all subsidiaries of NNPC must be profitable, must be able to generate funds and pay dividend back to NNPC and he has been walking the talk. Without him to be quite honest, it would have been very difficult to achieve this. The CEO of the upstream is also a strong supporter of NETCO because they have been supporting and ensuring that we are kept busy. So, that for me is a plus. In the past before I came here, we were begging companies to allow us work with them. Since I came in here, people are beginning to beg NETCO to work with them and nobody in NETCO in the last 30 years have experienced that because they now saw the body language of NNPC and they now know that NNPC wants to grow their own company, all these people are now coming, knocking – can we work with you? Can we partner with you? The kind of MOU’s (memorandum of understanding) I have signed with all the other companies since I came in here was far more than what we signed in the past. Because now they see the body language and they are coming in now to say let us partner, let us work with you because anytime they go to NNPC, they still refer them to NETCO and that’s the way it should be. I have never seen a national company that has the capacity to do their own engineering in-house without sub-contacting it out to their companies. I worked in Shell. I was in the Global Solution for a number of years. They are the people that are doing all the pre-feed engineering work for all Shell projects. It’s now transformed from Shell Global Solution to Shell projects. They manage all the activities of Shell engineering. It is only after they finish all the pre-feed they then get somebody else to come and do it. If it is only the pre-feed of all NNPC jobs that we do, we will be busy 24/7 but we are competing with other people to do that. Why should we? But the truth about it is that NNPC current top management has been extremely supportive. It has been very strong supporter of NETCO and that has helped us tremendously.
Realnews: You soon will be retiring. What will you like to be remembered for?
Aliyu: I will like to be remembered as an Enterprise First NETCO MD that was focused on growing workforce competencies, improved product delivery qualities to our numerous clients, substantially increased revenues and profits, paid dividend to NNPC, fair, equitable and just to the staff and as the man that chat the growth path for NETCO. The legacy I like to leave in NETCO is a legacy of commitment, a legacy of people that are strong professionals with enterprise force mentality everything about you being there is about growing the company you work for. I will be happy, yes after I have gone to say NETCO is the go-to company in Nigeria. And also, NETCO is the hub of EPCM projects in West Africa. One of the things we have been doing since I came in here is to venture out of Nigeria to see how we can collaborate with other companies outside Nigeria to be able to execute projects outside of Nigeria and we have already started that and I am sure my successor will follow up on that.
Realnews: Last year November you inaugurated anti-corruption committee in NETCO. We will like to what this committee has achieved so far.
Aliyu: Yeah, it is very interesting thing because as you know, our group managing director inaugurated the committee for NNPC wide anti-corruption committee and we then were asked to replicate it to all the other autonomous business units and following from what my GMD did, we inaugurated one also, we had the team together and the chart is that nobody is spared. I even told them clearly that if you have any petition against me, go to them. Don’t report it any way to me because I am the one in charge of the one here; go all the way to the corporation to report it. So, it’s very important for people to know, we have whistleblowing policy, people are allowed to report any kind of misdeeds for any kind of anticipated or suspected act of corruption and people are charged to do that and they have full immunity to do that.
Realnews: Has there been reports?
Aliyu: No absolutely not. The interesting thing about NETCO, you know, is that we have very solid processes and procedures. One of the things we have also achieved, of course, is the migration from the old ISO (International Standard Organisation) certification, ISO-9001-2008, ISO 14001-2008 to ISO 9001-2015 and ISO 14001-2015. That is the latest quality management system and it really means that responsibilities for your processes and procedures no longer lie with the managing directors. It lies with the process owners and you are audited against your processes on a regular basis. You cannot afford to fall behind. So, we are one of the NNPC companies that has achieved this feat. So, for me, it is something that we need to work with and ensure that that we maintain it.
Realnews: Let’s look at your background. How did you become an engineer? Did your parents or somebody influence your choice of career?
Aliyu: No, interestingly, my father was a petrol dealer. He had petrol stations that he was operating and he operated for 30 years. The kind of discipline we had in my house is that once you finish from school, you must come to the petrol station and spend two hours, all the boys, every day before going home. So, I was doing that every time. But once a month, we have all these top guys from Shell. In those days, it was called Shell Petroleum, they would come and inspect the petrol stations and see how things were and a week before their arrival, my father was all over the place, everybody was cleaning, making sure everything was okay. I kept asking myself who were these people that were always torturing my father. So, each time they came, I would make friends with them. They would take me in their car and we would go round and at that time, I was just finishing school. So, they really liked me and I was asking them questions. And I said look, ‘I am just going to the university, what is the best course that I can do and I can be like you.’ They said oh! If you want to work in an oil industry, be an engineer and I said okay what kind of engineering and they mentioned chemical engineering. They mentioned other aspects of engineering. So, I started having that in my mind. So, when I applied, I got admitted into chemical engineering and I told my father I wanted to go and do chemical engineering. My father was not a graduate. He just finished standard six but he had a younger brother who was a lawyer. So, when I told him that I had been admitted to study Chemical Engineering, he said ahhh! Okay let’s go and talk to the lawyer because lawyer finished from the UK (United Kingdom), he was there for nine years so he was expected to be extremely knowledgeable. So, when we went to the lawyer, he told him that look, this your nephew had been admitted. He said what course. I said Chemical Engineering and he said there were only three Engineering professions in the world – Civil, Mechanical and Electrical, there was nothing like Chemical. So, my father said you have heard him (laughs) so go and look for another course that you can take. So, I now said to myself but inside of me, I was admitted in the UK and I said, how will a university in UK admit you for a course that doesn’t exist? Then, luckily on one of the days I travelled to Apapa to go and order petroleum products for the gas station. I was given a lift by one of the Shell people and I told him my dilemma, I said look, this is the problem I have. He said what, Chemical Engineering. Have you heard they have just started the Kaduna Refinery, they have just started the Warri Refinery, it is the chemical engineers that will really make the place happen, go tell them they don’t know what they are talking about. So, I went back home and told my dad. He said really? I said all these people you are running after, it will be us that would now be producing the product that they are selling to you. He said is that so? He said okay then, let us go and tell lawyer. I went to lawyer and narrated the whole story, he was very angry that he was an authority. He studied in UK and how dare this small boy start challenging his thoughts on this. I told you there only three engineering professions in the world. So, I left him totally dejected but my father and his younger brothers were very close, he will never do anything behind them. So, I now had a challenge. So, my father said well, if lawyer said no, it is no. I said no, no, you promised me. Because that time, I had finished my high school and I took an intern with my dad for one year and he told me if I were able to turn the gas station around, he would send me to any university of my choice anywhere in the world. I said I am almost a year into this contract, you made a promise to me, this is what I want to do. I have done my bit, you do your bit. That statement touched my daddy’s heart and then he said okay and asked when the admission was closing. I only had two weeks to pay. So, he then said okay, next weekend, you remind me. So, the following weekend, I went to him and he asked how much was needed. I told him what the tuition was. So, he said okay let’s go to the lawyer, I said I was not going. He said no, no, no, let us go to the lawyer. We went to the lawyer and he said, I have decided that Siky is going to do that programme. This is the tuition, give it to him and pray over it. So that’s how I became a Chemical Engineer and no single regret for that decision to date.
Realnews: So between your father and mum, who influenced you the most?
Aliyu: The most? I think both of them. My father was a very strict disciplinarian. My mother was the soft jelly. You can never do wrong by my mother. But my father was the one that never spared the rod to spoil the child. He would flog you until you turn around. So, my mother was so soft. She was the go-to person. I couldn’t sit down and have a discussion with my father in those days. He would just tell you what to do and you must do it. So, I was much closer to my mum but I love them both.
Realnews: How many children do you have?
Aliyu: Five.
Realnews: All of them are engineers or..?
Aliyu: Unfortunately, none of them wanted to be an engineer. They said we have busy lives. My wife is a medical doctor and I’m an engineer. I have been an absentee father for many, many years. So, they don’t like that at all. They are all into different fields of endeavour.
Realnews: You published a book
Aliyu: Yes, that’s correct. That was in 1989. It was in Chemical Engineering. It was on one of the courses in Chemical Engineering. One of the subjects of chemical engineering was separation processes. So, when I was in the university, I was putting a lot of things together because I really wanted to share the knowledge. So, you know, I published the book in 1989. It was sold in all the Nigerian universities where they were doing Chemical Engineering but hopefully, now that I am going into retirement, I hope to write more.
Realnews: You have more books in the pipeline already?
Aliyu: Yes, that’s correct.
Realnews: How supportive has the immediate family been considering the nature of your job?
Aliyu: I have been so blessed. My wife and children are understanding, loyal and supportive. It is time to kind of see a way of paying back to appreciate their dedication and support.
Realnews: Is there any other thing you will like us to know about the problems in the industry like the lingering fuel scarcity.
Aliyu: No. I will stay within my area. But I know that my GMD is doing a lot of work to resolve the problem and I think it’s not for lack of trying. I think that just some saboteurs that are really making things very difficult. I strongly personally believe that people are actually diverting our products outside Nigeria. So, it’s not for lack of trying. The GMD has his very strong team, everybody is working round the clock. I have visited them in Abuja. They have a war room where they start very early in the morning and sometime they are there until two o’clock in the morning every single day since before Christmas. So, they are trying and they are putting a lot of money; NNPC is importing millions and millions of litres of petroleum.
Realnews: The fuel consumption has quantum leaped; from 30 million litres to 50 million litres now…
Aliyu: Absolutely. I am now hearing 50 million litres. Yeah, but I don’t even believe that figure. I don’t know where that figure is coming from because I am not sure if it is coming from NNPC but there are a lot of information out there that nobody is too sure of but the GMD is doing his utmost best. He is working day and night with extremely dedicated team to try to resolve this issue and I have confidence they will resolve it.
Realnews: What of the issue of fuel subsidy, do you think it will ever go away in the country?
Aliyu: The truth about it is that if we are importing these products far more than what we are selling them, it’s no bail out. The only way out is to have more refining capacities and even Dangote that is building his own refinery now is not going to sell it at N145 per litre. You can bet your last dollar on it. It is in an export zone, he will probably sell it at the going price for somebody who will then bring it from the exporting zone and import it into Nigeria. So, it’s not going to be cheap. The only solution is to have refineries locally that work. And until that happens, it will be a very tall order to remove subsidy. The only other way you can remove subsidy is to deregulate completely and let dealers compete. Let people buy it for whatever they can. If there is competition the price will crash because if I know I can go to this station and buy it for N145 and this one is asking for N200. I will go to where I can get it cheaper and once there is that competition, the market will determine the price. The truth about it is that currently, it’s costing us more to bring these products in than we are selling them and you know; it is a major sensitive issue when it comes to deregulation or increasing the pump price of petroleum product. It is a very sensitive issue but the government has to take the bull by the horn someday. Our former minister did a great job in the past when he deregulated. You know, of course, you cannot deregulate and keep it static because everything is totally dependent on the exchange rate. When he deregulated it was N199 to one dollar. Today, it is N306 officially but all the people cannot be buying to import officially, so, they have to go and change at the black market. If you were selling at N145 when it was N199 how can you still want to sell it at N145 when it is 360? How? And for as long as you don’t control this, for as long as NNPC is allowed to bring it and subsidise it, people will always find a way to get the product out of Nigeria. Another thing you need to check is what is the total consumption of all the West African neighbouring countries? How many cars are in those places? So, where is the 50 million litres per day coming from? Have you thought about it? Maybe somebody is just buying and storing hoping that this thing is not going be sustained and someday you are going to be forced to increase the price and if you have millions of litres stored, you become an overnight Billionaire. So, anything is possible. People are doing all sorts of things but NNPC is on top of it. The GMD is extremely capable. He is a pure professional and he is working so hard day and night to ensure that this menace is taken care of.
Realnews: What is your normal day like as a chief executive officer?
Aliyu: Very busy. One of the things I actually did in NETCO which I didn’t remember to state was that I realised we spend a lot of time doing meetings. We have to try to find out how things are going but I realised a lot of people spend a lot of times in meetings, so what I then did was to look at all the meetings we had at NETCO, the statutory ones and the regular operational ones and the rest of it and I found out that when I average it out, we only work three days a week. We spent two days a week in meetings and that was costing the company over $2 million a year. So, the first thing I did was to make a presentation to my team and let everybody understand what it means because if you are spending two days a week in meeting and who are the people in those meetings? So, how much am I paying you? NETCO is man-hour based. So, every time you sit in a meeting that is not productive, you are losing money. So, we cut down the length of time we spent in meetings into half and we have auditors monitoring that. We strategised how the meeting must be done, only issues due for discussions and issue for actions, every other thing for information, read it before you come, and interestingly, our productivity has immediately gone up. Because people were sitting in meetings and they were not working so we were having delays on execution of some of the projects. Since we implemented that, things are getting on track and we are saving time. We are saving money, our productivity is going up. So, that for me is also another achievement that I am very proud of.
Realnews: Often, there are accusations that corporate organisations run their activities in secrecy. We will like to know if your company is compliant to Freedom of Information Act.
Aliyu: We are a government company. We are open. There is nothing to hide here. Like I said here, we have processes, we have procedures, and our accounts are audited on a regular basis. Now, we are not lagging behind in our regulatory and financial regulation functions. Like I said to you, when I came in, there were three years of outstanding financial audits and AGMs, now it’s all cleared. I have had the AGM in 2016 and we are about to start the AGM for 2017. So, we are fully compliant with financial regulation council’s requirements.
Realnews: There must be an experience you had here that you would not want it to happen again or if it happens, you would handle it in a different way. What is that experience?
Aliyu: Those challenges vary in nature and some are very sensitive and I will not like to discuss them here. However, we have learnt lessons from them and we are stronger from those experience.
– Mar. 26, 2018 @ 20:19 GMT |
Tags: Exclusive: How NETCO became best Engineering Firm in Nigeria - Siky Aliyu
