From Uche Usim, Abuja
With over 40 years cognate experience in the oil and gas sector, Dr Leemon Ikpea, the Group Chairman/Chief Executive Officer, Lee Engineering Group and Allied Companies Limited, has seen the industry go through major shifts, reforms and growth.
But in all the metamorphosis from the analogue era to digital sophistication, Ikpea insists Nigerians have been at the driver’s seat and not mere servants to expatriates as some may want to think.
According to him, there is no empirical evidence to show that foreign technicians and engineers are more experienced and competent than their Nigerian counterparts; even as he called on the federal government and stakeholders to deepen support of local players.
“Expatriates are not more experienced than us, except of course in the area of importing and deploying those huge, sophisticated machinery, which we have begun to build some of them here in Nigeria”, he told Daily Sun in an interview.
Ikpea, who is celebrating 31 years of establishing Lee Engineering Group, has urged the government to immediately float a national security fund into which International Oil Companies (IOCs) and local firms can pay a percentage of their profits to tackle the ravaging insecurity and ultimately grow the economy.
According to him, no sustainable development can take place in an atmosphere of chaos, noting that creating a conductive operating environment remains the most fundamental thing to do before expecting investments and growth.
In this interview, he speaks more about his experience, the industry and the operations challenges therein.
Insecurity and oil theft
This is a very critical issue. The security situation is really very bad. It’s a big issue and we can’t leave it for the federal government alone to handle. Big firms like the IOCs should also step in. We can have a security fund in a pool in a bank. If there are flashpoints, money can be taken from there to sort them out. We can tax multinationals to take a little percent of their balance sheet to fund the security fund, it’ll help. The money can even be used to tar roads. I tarred my roads here. We have Mopol and other forms of security. We should take it very seriously.
I have lost seven staff to insecurity. Since August, all my equipment have been rotting away at some sites and we are losing billions of naira to this forced shutdown in some locations. Let the multinationals collaborate. We also thank the NNPC for the discovery of oil thieves.
The fact of the matter is that incessant vandalism of national oil and gas assets is currently robbing Nigeria of the chance of taking advantage of the high international oil prices and this is disturbing.
If they vandalise the pipelines, how would the production get to where they’re supposed to get to? By the time you put more oil there, it doesn’t get to the destination.
We need to tackle insecurity immediately. But the effort they’re putting in, including the military, the NNPC, and everybody supporting them to fight this evil is good. I’m pretty sure in the next two or three months you’ll see the difference. The efforts will help ramp up supply.
As a company, we are losing a lot to insecurity since. We have exited sites that we were supposed to be doing engineering and construction works. We also lost some workers. It’s a very traumatic experience.
Deepening local content
The advocacy for local content started in my company in Warri years ago. We realised that everything was given to foreigners, yet Nigerians were the ones doing the real work. The Local Content Act has really helped Nigerians and we thank the federal government for that. Nigerians are growing in capacity daily.
Honestly, there is a need for the government and relevant stakeholders to mandate International Oil Companies (IOCs) to patronise local firms because from my over 40 years experience in the oil and gas industry, there is no empirical evidence to show that expatriates are more competent and experienced than Nigerian technicians and engineers. They are not, except of course in the area of importing those huge, sophisticated machinery.
The truth is, Nigerians are capable of turning around the fortunes of the downstream sector. We built the Warri refinery decades ago and it was commissioned by President Muhammadu Buhari, who was the federal commissioner for petroleum at the time.
Nigerians did the electrical, installations, etc. White men supervised and brought their cranes and forklifts. Nigerians did all the erections.
So, overflooding of the oil and gas space with foreign hands when there are capable local expertise is robbing Nigeria of the fortunes that should come to her.
Having said that, I have to appreciate the federal government and the Nigerian Content Development and Monitoring Board (NCDMB) for the renewed attention to boosting local production of equipment used in the oil industry. So, we won’t need to rely heavily on offshore assistance in this regard.
For me, the Nigerian Content Development and Monitoring Board (NCDMB) management must be encouraged. They have continued to do a good job, having increased local content to about 50 per cent.
From almost zero participation, Nigerians now occupy major positions in the oil and gas industry. For instance, our multi-million dollar fabrication subsidiary, Lee Engineering International Machinery Services Limited is under construction.
When ready by the first quarter of next year, it will produce high pressure vessels, heat exchangers, scrubbers, among other materials.
We must be mindful of the fact that foreigners are wary of technology transfer because it will eventually take away their jobs. So, Nigeria must develop its local economy to be able to play big at the world stage.
Currently, over 2,000 personnel from all over the country work for the company. Majority of those employed are from communities in the Niger Delta, which are also host communities to the company.
You can see the gains of local content in boosting job creation, growing the economy and helping to tackle insecurity.
Diversification
I believe in integrity, hard work and growth. At work, I was the first to resume and last to close. Riding on these pillars, Lee Engineering has been diversifying its portfolio, including the floating of Kizi, one of the companies which recently won one of the marginal fields awards. There is the aviation subsidiary as well as the Travels and Tours Company, among others. We have eight subsidiaries at the moment.
Asphyxiating cost of operations
This is a very huge challenge. Diesel alone costs so much. It’s a huge dig into our purse.
Average of spend on salaries is N300 million and I ensure they are paid as and when due. In the worst case scenario, the third day of the new month. This format of operation is very tasking. I ensure everyone is paid regardless of what the situation is; even if we have to borrow to do that. I love to keep the operating environment tranquil for our goals and objectives to be achieved.
What we want
We need to be patronised. Consumers of our products and services should look inward. We need to be encouraged in many ways possible. We’ve trained Nigerians to man these equipment. Some we trained in the US and others in Europe. They’re now the engine room for our operations. The more patronage we get, the more people we employ and the better for the economy.
Banks’ support and interest rate
For me, my good relationships with financial institutions stands on honesty, integrity and transparency. The truth is that many banks have the capacity to fund many projects in the industry, but businessmen in the industry must be honest with their bankers to earn their trust in the long term. That is what I’ve done.
On interest rate, if I want any facility, I go to my bank and we have a decent conversation on the facility, the payment schedule and interest rate. We argue, agree and disagree but eventually we come to a sort of common ground, amicable, workable agreement that favours all parties. I don’t default on loans.
Future plans
We are diversifying our investment portfolios and as a man of faith, I can say that Lee Engineering shall, in the next five years by the grace of God, double its staff and create more employment for Nigerian youths.
This company builds special equipment for the oil and gas industry. The people working here are Nigerians. We will earn foreign exchange, and will be a boost for local suppliers. Vendors will supply raw materials and it will have a multiplier impact on the industry and the economy ultimately.
Local content sector has improved tremendously in the last few years and there are indicators that the next five years, Nigeria’s participation in the industry could hit 90 per cent.
Background
I come from a humble background. In fact, my background is a rough road. I lost my father when I was 14 years old and my mother died 11 years later. I’m the most senior. I have 44 years of working life and I was usually the first to resume and the last to close. I’m an office man but not confined to the office.
I always go to the field to learn. It was not easy for my parents. They were quite challenged financially and that explains why I trekked several kilometers to go to school.
I’ll trek from Iruekpen to Warri about 17km to go to school.
I sold kerosene. I was a newspaper vendor; I pushed wheelbarrows and all that to survive because my parents were very poor.
But I can’t forget the good values of discipline and humility they taught us their children. My humble background would forever remain a motivation to help the needy.
I established Lee Engineering in 1991 and by 1992 I was driving my first Mercedes Benz. I started my business with a 40ft container.
By 1993, I built my first house in Warri.
I worked in many places. I worked in Eket, Bonny, Kaduna, Ilorin etc. When I saw the workload was hefty, I employed drivers and today I have more than 90 drivers and 150 security guards.
Foundation and CSR
I have a Foundation, Leemon Agboinjagwe Ikpea, which has trained more than 40 medical doctors, hundreds of orphans and widowers and empowered many.
Over 200 Nigerians are currently on scholarship in different fields of endeavour. The foundation has also sent hundreds of Nigerians with critical health challenges to receive treatment abroad.
These spring from my being in touch from where I’m coming from as a poor Nigerian. It’s like giving back to society and making it better. It’s something that will continue even when I’m gone.
31st anniversary
Today, we are celebrating our 31st anniversary. By the first quarter of 2023, we shall be commissioning our fabrication factory in Warri like I mentioned earlier. It will save the country some huge forex spend. The government can channel the foreign exchange cutbacks to other areas. With that factory operational, Angola, Mozambique and other African nations will come and buy fabricated materials here in Warri. We are building a jetty to aid the export of our fabricated products.
Good thing, the Ministry of Petroleum Resources, the NCDMB and other relevant authorities have come to inspect our facility. That facility is my thinking. My brain. I learnt from foreigners. Those driving our local content are committed and hard working and we must support them.
Relaxation
I don’t have a social life. I’m always working and planning. When I sleep is when I rest. There is so much work to be done. Clients’ expectations are high and we have our name to protect. I’m big on integrity.
