Eterna positions for gas market, decries high cost of doing business, forex scarcity

Eterna Plc has lamented over the unavailability of foreign exchange and unattractive high interest rates hindering the growth of oil and gas companies in the country.

Indeed, the company stated that as a result of COVID-19 and the Russian-Ukraine war, doing business has been challenging in Nigeria and the rest of the world.

At a media briefing in Lagos, the Managing Director, Eterna Plc, Mr. Benjamin Nwaezeigwe, explained that despite these bottlenecks, Eterna was able to record a N4.1 billion gross profit in the first half of 2022 courtesy of its massive investment in human capacity development.

In his words: It has been tough doing business in the country. In spite of that, we have been able to record a N4.1 billion gross profit combining Q1 and Q2 even though it has been tough and the drivers for that is what I would call the quality of staff that we met on ground when the new management come on board and of course, the additions that came on board.

“Everybody seems to know what to do, what direction the company is going and we brought in some efficiency as well. We took our time to renegotiate some of the rates that we are having. So far so good, I would say the business has not done badly in as much that it has been really tough,” he said.

He further stated that the Nigerian National Petroleum Company (NNPC) being the sole importer of petroleum products the nation consumes still remains a challenge, adding that the non-active refineries compelling Nigeria to import petroleum products are major challenges hindering the growth of the oil and gas sector.

“The scarcity of foreign exchange and the most recent one is that there is a daughter vessel, but no mother vessels to load from. These things cost huge amounts of demurrage. We have seen a situation in January where you can load with $140,000, but as of today it has risen to $460,000 and to hire just one vessel from $17,000 per day is currently $45,000. It has been pretty tough,” he lamented.

He said the high interest rate at 20 to 25 per cent is discouraging investments in the country, saying that with such interest rates, there is little or nothing oil and gas operators can do borrowing funds at high interest rates.

“So that has also been some of the challenges we have been facing, but we hope things will improve, but in spite of that, we have been able to pull through. There is a scarcity of mother vessel and most difficult is when you are planning to load into a daughter vessel when there is no mother vessel to load from and if the mother vessel eventually comes, there is a rush to load from it and if you are the last company to load, you will have to pay so much demurrage which is hitting deep into slim profit margins,” he stressed.

He advocated that the federal government prioritizes investment in shipping and modular refineries to address some of the major challenges hindering the sector.

He however stated that the oil and gas sector is fast tilting towards the LPG and CNG market, pointing out that Eterna has positioned itself for the future by investing in skids to be deployed in most of its retail outlets across the country.

“The industry is moving towards LPG and CNG. This is the future of this business. As a company, we have started positioning ourselves for that. We are planting skids and, in the future, we are also planning to have our own spare. The main thing we are doing now is to have LPG skids located in most of our retail outlets,” he said.

Earlier, the Executive Director, Corporate Services, Eterna Plc, Phoebean Ifeadi, said the company has so invested over N20 million in the past two years on different donations and Corporate Social Responsibility (CSR), stressing that for the current year, it intends to deepen engagements with it host communities.

We want to focus on empowering the youths in our host communities. Our focus for this year, we are going to be doing that to ensure that we engage and empower the youths to get them to live a better life.

“We are also hoping that our plan will be of immense benefit to the beneficiaries. if you can. We also want to ensure that we are committed to carrying out our social responsibility starting with this for this year,” she averred.

On his part, the Chief Financial Officer, Abudukerimu Sule, advised that Africa must prioritise attention towards energy security.

He stated that Africa still has the least energy consumption per capita, pointing out the need for African leaders to collaborate by putting resources together to achieve energy security for the continent.

In Africa, we have access to the least energy consumption per capita. It is right for Africa leaders to come together to invest heavily in energy within the African space in the most cost-effective way.

Collaboration will be the key answer to where African leaders put resources together looking at a blend of LPG and fossil fuel by linking pipelines across the region for free flow of energy, because as of today, renewables are very expensive and if you look at Africa, the poverty index is very high.

“For me, I think energy security should be the way forward in the interim. For Eterna, regardless of what the market is, we are well positioned to follow suit. We have also continued to encourage most of our stations to deploy the use of solar technologies to power their operations across the country,” he noted.