TheCable

Babs Omotowa, former managing director of Nigeria Liquefied Natural Gas Limited (NLNG), says recommending a Nigerian company to start providing helicopter services for Shell in 2010 was one decision that could have ruined his career. 

He took the risk, he said, because he believed a Nigerian company had the capacity to do it as the foreign company providing the service was becoming extremely expensive.

Omotowa narrated his experience in an exclusive interview with Akin Monehin, a thought leader.

According to his LinkedIn profile, Omotowa, who currently serves as chairman advisory board of Montserrado Group, worked with Shell Group for over 18 years.

Although he did not mention the name of the company, TheCable found out that he was referring to Caverton Helicopters.

Omotowa said he took the “tough decision” when he served as vice president for logistics, infrastructure and health, safety and environment for Shell companies in Nigeria.

He said a foreign company, which enjoyed monopoly, had been providing helicopter services for Shell but had begun to exploit the system by coming up with increases that could not be negotiated.

Omotowa said he then worked with his team to discover and support local companies with a prospect of delivering the same services.

SUMMONED BY THE BOSS

“We were working with these local companies and two of them really took the challenge. They found partners in Denmark and Canada, and started to develop their management systems, their technical capabilities. At some point, we felt that they had really started to have the kind of capacity that we could make use of,” he narrated.

“So, I got the Shell technical authorities to come and audit, and assure that they indeed perform to the sort of challenges that we had in the oil and gas industry. Our experts came from London, assessed them and they passed the companies that they could indeed provide the services with the partnerships they had formed.

“We went for a tender and as I expected, the incumbent did not win because they had become quite expensive. They had just grown themselves beyond competition and the first time of facing competition, they just didn’t win. So this local company (Caverton) won, and of course, it became a pause time for everyone. Now that the local company has won, what is going to happen?”

Omotowa said he was summoned by his boss who had just joined the company while they were processing the contract for Caverton Helicopters.

He said his boss quizzed him about how risky it was for a local company who had never worked in the oil industry to provide such service.

He said his boss notified him of concerns raised by the aviation team at the head office, warning that the move “can be a career-ending decision”.

HELPED CAVERTON SECURE LOAN

Omotowa said he maintained his position to allow Caverton deliver the service after winning the tender.

He also got Shell to secure a loan of $85 million for Caverton to purchase its own helicopters rather than lease aircraft for the seven-year contract.

“Of course, when I first brought the proposal again everybody refused. The finance team in the head office refused and I justified why we had to lend them money. One, it was for our own safety. Two, we had committed, as a company to develop local capacity, we had local capacity development policy, so why not put our money where our mouth was?” he asked.

“They said ‘but you know this is unprecedented for a company to lend a contractor money, and in Nigeria again. The risks are too high, they won’t pay back’. I said they will pay back because I have asked them to bring a bank guarantee. So if they default, we will call on the bank guarantee.

“Anyway, to cut the long story short, after quite a lot of discussions, running over weeks, they agreed and we borrowed them the money. So, now the contract was awarded, money was loaned, so the risk became if anything happened during the seven years of the contract, if they either didn’t pay back or there was an accident or incident, of course, I would have been having to answer different query or I might have had to actually leave the company.

“Fortunately, I think we had done enough due diligence. The company ran for seven years, there was no accident. The safety performance was about the best in the industry, and their service performance was better than the previous and they repaid back all the money within the seven years we wanted. Not only did they do that, they developed capacity, they went on to win contracts of other international oil companies (IOCs) in Nigeria. They even won contracts of IOCs outside Nigeria. Now we have a local company who is now able to provide that service to Nigerian companies.”

Caverton Helicopters currently operates out of a 10,000 square meter flight facility at the Murtala Muhammad International Airport in Lagos.

The company also owns and operates out of several purpose-built facilities in Victoria Island (The Ozumba Heliport), Port Harcourt (NAF Base), Warri and Cameroon.