Deregulation:Swift implementation of PIA ‘ll enhance downstream performance- Eterna Plc MD

 

Says Nigeria needs to use its resources to provide energy in the most cost-effective way

. commits to become most preferred energy company in Africa

 

 

Mr Benjamin Nwaezeigwe  is the the newly appointed Managing Director/Chief Executive Officer of Eterna PLC, Prior to his appointment, Mr. Benjamin was appointed the Acting Managing Director / Chief Executive Officer in April 2022. In this interview with Energy Editors  he shared insights on  the challenges of doing business in Nigeria, Energy transition , his company’s vision, projections and future investment outlook. UGO AMADI reports

 

Now that the world is talking about energy transition and Nigeria is seeking energy justice. What is your advice for African leaders in ensuring a smooth energy transition within the limited period? What are your energy transition plans?

Our focus should be on energy security for now. We contribute the least to global warming. We have the least access to energy per capita. At this point, it is important we use the available resources to provide energy in the most cost-effective way. We can always catch up on renewable solutions as they become cost-effective.

At best, we can enhance regional trade generally. Fuels can just be part of the mix. E.g., pipelines and better port facilities to move the products across regions.

 

What are the challenges so far in doing business in oil and gas generally in Nigeria?

Some of the key challenges facing the downstream today could be ascribed to non-active local refineries, and supply chain disruption (including scarcity of mother and daughter vessels). Most vessels have relocated abroad due to high fees paid by the international Oil companies-IOCs. This has affected our operations. You are perpetually in a situation; you have paid for a PFI but no vessel to move the product and even when you have one the rate becomes another challenge. We have seen rates moved from $140,000 at the beginning of the year to $460,000 by August 2022 per vessel. You can understand the huge challenge this is.

Others are scarcity of foreign exchange, making the importation of product very unstable, continuous review of the MPR by the apex bank, affecting local borrowing, and insecurity among others.

The most recent crisis every organisation is dealing with today is the human capital flight. In order words, the massive movement among the youths abroad for greener pastures. The solution would be to have the right structures in the economy that would attract staff to stay for a longer time. We have lost a couple of staff to this new normal.

Nigeria’s downstream sector has continued to underperform due to the regulated price regime. What should be the clear-cut strategy for getting the downstream sector to work effectively?

Proper deregulation and the swift implementation of the PIA would be the answer. Good a thing, the government has incorporated the Nigerian National Petroleum Company Limited, to purely operate like every other business venture. We hope it meets the objectives for which it was incorporated.

 

Now that the PIA has been signed, what efforts do you think the federal government should take to catalyse the growth and sustainability of energy businesses in Nigeria?

One of the major efforts the government should make, is the quick implementation of the provisions of the Act. The Act has clearly stated the road map for the growth and sustainability of energy business in Nigeria but without implementation of these provisions we would still be where we are. We have seen genuine efforts from the Government with the incorporation of the Nigerian National Petroleum Company Limited and we hope other significant provisions of the Act would be implemented accordingly.

What makes your lubricant better than others in the market?

Eterna manufactured and marketed Lubricant range are purposely engineered to provide an excellent engine performance, maintain engine cleanliness and extended drain period.

 

Eterna offers a full range of lubricant options to meet the needs of every driver, vehicle manufacturer, Ships, Power Generating, Cement manufacturing and Food processing equipment.

 

Research and Technology is the bedrock of Castrol lubricants, distributed and marketed by Eterna Plc.

 

Sir, you recently declared a gross profit of about N4.1bn, how did you manage to make such progress within the short period you took over?

As mentioned earlier, the company has lot of potentials that were yet to be fully maximized and this we have done by increasing our trading activities, expand our horizon beyond the current state and tightening up our business processes. We have also reengineered our relationship with external stakeholders by redefining some of our business models which gave us an edge among the competitors, hence our excellent performance for this period.

Again, our staff are our key assets, and they are the major driver of these numbers month-on-month.

Energy transition is imperative in line with the current climate change. The world is moving towards a cleaner energy that would aid decarbonization of the environment. Several developed countries are already implementing this with the employment of renewable energy.

 

African and other developing nations need to embrace this transition by investing in massive technology that would ensure the smooth transition without affecting the economy activities. In addition, campaigns and awareness of this transition should be top priority for African leaders as this would enlighten their people on where the world is moving to in terms of renewable energy, emissions reduction and decarbonization of the environment.

 

We at Eterna are well positioned to ensure we are at the fore front of meeting the demand of this energy transition. Parts of our 5-years strategies is to be one of the largest suppliers of LPG in Nigeria and other African countries. We are also planning to ensure most of our stations are running on alternative power such as solar energy to aid the cleaner environment. There are also plans to ensure our retail stations are well equipped with facilities that would service energy requirements of electric cars and other equipment.

 

By and large, Eterna is fully prepared for this energy transition and we can assure our customers that whatever their needs are in this new face of energy would be adequately met.

 

Congratulations on your confirmation as the new MD, you have been in an acting capacity for some time now. How has the business fared in the last few months you have been in an acting capacity? Looking into the future, what are your future, projections and vision for the business?

The operating environment today is tough for all business owners. But as a company, we resolved to be more creative in how we do things. Eterna has done significantly well compared to past periods and other companies in downstream. The major driver of this performance is the quality of staff we have on the ground and the additions during the period. Everyone is clear as to what the expectations are. The single and most paramount objective remains to continually create additional value for stakeholders.

In terms of our outlook, we look to expand our operations to possibly cover the major markets for the white product (Lagos, Delta, PH and Calabar). We are currently in Lagos and Delta. We also look to revamp our lubricant space to be supported by world-class automated technology. Our QAQC has been certified as standard. We also plan to further strengthen our outreach in terms of more stations across the country. We currently have active stations based on different mix models (Franchise, Leases and company owned).

The vision of the company remains what it is (To be Africa’s preferred Energy Company). I shall guide our operations towards attaining this vision.

 

Sir, Eterna PLC recently changed ownership. What motivated the investment and future investment outlook?

Eterna has a beautiful brand with wonderful structures that most investors in the downstream sector were all looking at. One of the key motivations for the investment was the great potential that the company has and the brand.

Since we came on board, we have been able to maximise the potential and increased our operations by optimising the huge asset base of the company. This is evidenced in our Half year report, where we close the period with a gross profit of N4.1Billion. The future investment outlook is positive and by the time the company gets close to its full potential, it would be the most preferred energy company.

The future investment would be in Retail, getting trucks to move products around the country, dotted lines into NFR (non-fuel revenue) space and the optimisation of automated technology to support our lubricant blending at the Sagamu plant.

 

What are you planning this year in terms of CSR and how much have you spent so far on your social investment?

Eterna Plc has invested over 20 million in the past 2 years in donations and our Corporate Social Responsibility Effort (CSR).

 

In 2022, we plan to further deepen our efforts and engagements with our host community in Ogun State and contribute towards uplifting and empowering the youths. We would invest more funds in Corporate Social responsibility. Our special focus will be on Education and Health.

 

We hope to build and empower the next generation of Business and Nation Builders. We also hope that our Corporate Social Responsibility effort will make the desired impact in the lives of the Beneficiaries in our Host Community.

 

How would you say that Eterna has impacted the nation’s economy since you started operations here?

Eterna has contributed immensely to the economy right from inception till date. For instance, during product scarcity we have ensured that we continually take product to all locations, including the far north to cushion the effect.

Like the said before, in 2020, we contributed towards COVID-19 Intervention Funds and sponsoring of youth entrepreneurial program. In 2021, we also contributed towards a community development program in Rivers State. All these are evidence in our annual reports for the various years.