Mr. Ed Ubong is the Managing Director, Shell Nigeria Gas Limited (SNG). Ubong is responsible for leading the company and safely delivering its domestic gas growth aspirations. He joined Shell in 2001 after completing a bachelor’s degree in Electrical & Electronics Engineering from the Federal University of Technology Owerri and completing the Shell intensive Training Program (SITP) run by Robert Gordon University Aberdeen. He also holds a master’s degree in Engineering from the University of Southampton, UK, and a Master’s in Business Administration from INSEAD (studying in France, US, and Singapore). Ed is passionate about unlocking the domestic gas-to-energy value chain.
He recently spoke in a Shell sponsored “Canvas-Niger Delta Roundatable” live radio programme with the Topic: “Sustainable Business Strategies and Support to COVID-19 Efforts”. Canvas – The Niger Delta Roundtable which is in its third edition, is a radio discussion programme sponsored by SPDC with the aim of fostering conversations with the potential to awaken the people of the Niger Delta to the imperative of creating a sustainable, thriving and business-friendly environment for the region’s prosperity and well-being. The program also aligns with the Federal Government’s drive for an improved outlook for the Niger Delta business environment.
Below is the excerpt of the interview monitored on Nigerian Info 92.3FM, Port Harcourt by BIGPEN NIGERIA team.
Though we have had guests on Canvas who lead small and medium scale businesses and they had discussed how the COVID-19 pandemic has changed their businesses and its devastating impact on them. But you are a major business. A multinational. Can COVID-19 also impact your business? Is your business not too big to be affected negatively?
It is right to say that COVID 19 has also impacted the Shell businesses in Nigeria, Shell Nigeria Gas Limited included. We are not too big to also be negatively impacted. This pandemic is unprecedented. Something that most people alive today have not experienced. Except, maybe, the few who were alive in 1918 when there was the Spanish Flu. The world has gone into lockdown for some months; but all of us still require key products and services.
Here in Nigeria, we have a very close co-ordinating team led by the Country Chairman of Shell in Nigeria, Mr. Osagie Okunbor. He is co-ordinating our efforts and our business response in the country.
The pandemic has cut across various industries – travels, manufacturing etc. We have seen significant fluctuations in the price of oil, for instance. Several businesses have had to declare bankruptcy while some have had to cut down the scale of their operations. So, indeed, all of us have been affected.
The real challenge then, for resilient organisations, is how to find creative ways to come through this stage in time; so that we are still able to operate and provide services in what we call “the new normal”, as acknowledge that we have COVID-19 with us.”
How has this affected your operations?.
Since March 2020, we have had our staff working from home. So, majority of our staff work from home. A few staff in our field location bases (FLB) are those manning our facilities. These are critical staff that are required to be at the FLB, just to ensure that the base and the facilities are safe.
So, basically, for a lot of people in the company, it is the new way of “how do you work from home”. We have tried to put in place the right support structure. Of course, the key ones are digital systems, the network, communications, and maintaining the right work-life balance. Basically knowing where you draw a line between when work opens, and when work closes; and how then you balance this with family life.
On the customer front, we have over 118 customers that we sell gas to directly. All based on signed agreements. What we have done with them at this period is to stay regularly in touch with them. Our business development team makes calls weekly to get in touch with our customers, just to check on how the customers are doing. Initially, all of them went down with the lockdown. But, of course, we all realise that essential services needed to operate. So, the federal government, through the Presidential Task Force (PTF) Committee, with the ministry of trade and investments, granted waivers. The Manufacturers Association of Nigeria has also been active, trying to encourage its members to put in place the right controls that will allow them to begin to operate so that we can get the critical goods and services that we all need.
Late March and April 2020 were very tough months in terms of how everyone was gripped in the lockdown. But we are beginning to see how these companies have responded, put in place the right measures and are beginning to resume production.
For everybody, it is a massive learning curve. You do what you can, what you think is the right response. But we are still listening to our customers, hearing them, to see if there is any other thing we can do to support them at this difficult time.
How come businesses offering critical services and goods, indispensable products, are affected?
The first bit around COVID-19 in late March was the big issue around safety. It was less about the numbers, the economics and all of that. First, it was around “how do you keep people safe?”
Of course, COVID-19 caught everybody unaware. At the beginning, we did not have the right controls, then, to allow our staff to go to work daily and be safe. It meant staff had to work from home. Even, the medical teams were trying to understand how to respond to this pandemic. So, the whole of that period, there was a dip in our activities. We were basically just saying “keep the facility safe.” We were not talking about how to grow production or how to connect new customers? Instead, we were sort of just saying, keep the customers and keep the facilities safe. Minimise your exposure to the COVID-19 until these businesses are able to put in place the right control that would make the work environment safe. That was the big impact.
Won’t digitalisation cause businesses to realise “we might not need these many people”?
For us, at the moment, what is important is around keeping all our staff safe; not around what the negative impact of digitalisation could be.
But the truth is that every business is now using the COVID-19 lockdown to reassess what is important. How can you work more effectively, especially looking at the long-term and asking the question: if COVID-19 is going to be with us longer than, say six months or longer than nine months? So, the pressures are there, but our key focus is care for staff, care for our community.
What support are you providing to people in your downstream area?
You would have seen our direct interventions when the Pandemic started. You have seen us donate PCR testing machines, medical consumables, support to building of isolation centres in Rivers, Bayelsa, Imo, Abia, Delta, Lagos, Ogun and, possibly by next week, Oyo States. That was our first set of response, which is about strengthening the medical support system.
One of the things that we have also done, as a second layer, is that staff have also donated, to help ameliorate the impact of COVID-19 on other people. So, we had staff donation where money raised directly from staff are now being used to feed people at various isolation centres.
The 3rd leg is how do we run our business? For smaller companies that can no longer pay their bills as agreed, we are being flexible. We are providing longer credit periods for these businesses to respond and support them when they want to turn around their inventory.
I think the real solution is evolved by having that regular conversation with businesses. We don’t want them to go under. How can we help you to scale through this difficult pandemic period?
Are there sustainable strategies that can help position businesses to ensure they survive; thrive at this period?
I believe that it is a time for significant creativity. Creative solutions need to come up. Of course, the creative solutions begin staff. While for some businesses it has been in and off-peak period for them in this time. We have virtual meeting applications like Zoom, virtual market places like Amazon and the digitalisation that is going on. Try to use Social media to reach as many of your customers as possible and increase demands for home delivery services. These are all areas where different businesses have had to look at for growth.
This is also a point when you ask yourself, maybe I also need to optimise my cost. Draw up a budget where you can reduce cost. And it is this sort of thinking – difficult thinking but also very creative – that would help businesses come out of this pandemic.
The key thing of course is that for businesses that engage with customers, you need to continue talking to your customers; you need to continue asking them what they need. You need to continue checking how you can increase your service delivery even in spite of the lockdown.
What sort of infrastructure do we need to put in place for these emergencies?
Individual companies and governments, and everyone need to strengthen our medical infrastructure and how we respond to public health crises of this nature. Like I said before, we have done our part by donating medical equipment and consumables to hospitals; helping the government set up isolation centres. But of course, these sort of efforts need to be sustained on a long term because you don’t know when a pandemic of this nature would reoccur.
Also, having people lockdown for 24 hours a day means most of them would require power to be able to set up effectively: whether they are working from home or just spending time with their families. These also put a lot of pressure on the power infrastructure. This is an area where, of course, improvements have to be made.
It is a great thing that the Minister of State has declared 2020 as the year of gas; where we keenly develop the gas infrastructure that will help us close some of our power deficits.
We must also develop the Telecoms infrastructure. We are all relying on our phones to communicate with families, communicating with friends, communicating for work purposes. But that is also putting a lot of strain on that infrastructure.
Specifically, what support do you have for your host communities?
One of the key areas in terms of our cares for communities has been the areas where we contribute by supporting the efforts of the government around palliatives, around the isolation centres; where we used funds donated by staff to support the feeding programme.
We have also been keen to work with state governments, communities to ensure that whatever social investment we had committed to can be safely executed. We keep looking for ways to continue to provide that support.
How is SNG helping solve the access to energy challenges?
The major challenge facing most manufacturers in Nigeria is access to reliable energy for manufacturing operations. The businesses incur expenses on running power – generators, petrol, diesel, kerosene and coal. And these are not necessarily the cleanest sources of energy. High cost of energy generation, of course, increases the overall running cost, reducing the overall ability of these locally-manufactured products to favourably compete with cheap imports.
What we have done at Shell Nigeria Gas Limited is ask ourselves “how do we bridge this gap?” For us, that means how do we ensure that most of the manufacturing communities can switch to gas – which is cleaner, and which is cheaper. We have done this successfully in Abia, in Ogun and in Rivers States. Even during the lockdown, in spite of the challenges, we were able to complete our 20 kilometres pipelines expansion that now connects Ariaria Market, ITT in Aba, together with Osisioma, and Ogbor Hill. What it has done is that it has allowed some of those businesses to be able to come back up.
Overall, we have connected over a 150 kilometres of pipeline infrastructure specifically dedicated to gas for various industries. We have started a project in Polaku in Bayelsa State, which will allow us to take some of the gas within the Gbaran area to distribute it locally within Bayelsa State.
So, for us, it is about, can gas drive Nigeria’s industrialisation? The answer is yes. Can gas, by driving Nigeria’s industrialisation, help to provide increasing number of employments? The answer is yes. Can gas by driving industrialisation in Nigeria lead to states having more internally generated revenue? The answer again is yes. And I think it is a combination of these three-prong approach around industrialisation, providing employment and improving states’ internally generated revenues that will help the Niger Delta to grow its social base.
How can small businesses tap into your industry?
At Shell Nigeria Gas, we are still committed to connecting customers to gas. So our lines are still open. We are still building infrastructures now because we put in place the right COVID-19 protocol to be able to work safely. For example, in June, we connected a plastic and paint manufacturing company in Aba on to gas even though the pandemic is still on. So, for us, we are still committed to helping small businesses to switch to cleaner energy. There will be challenges but we will work together to see how that can happen.
The other bit of course is that over the pandemic period, we have worked with the Manufacturers Association of Nigeria and the federal government which allows businesses to put in place waivers that allow businesses to move goods freely. You know all the challenges with trying to get raw materials and all of that. So, MAN has issued waiver letters that allow small businesses to move their goods freely, provided they fall into the three categories that support the essential services.
But again, the key point is that if you are having a challenge around the energy space reach out to us at Shell Nigeria Gas Limited and we’ll work it together to see how we can support your business through this period.
The energy industry is a wide industry with significant value chain synergies to reach different people. What we are doing in SNG is trying to encourage companies to succeed. It is an industrialisation drive. The plastic and paint company, for example, is going to employ lots of people. That for us is our pride. The company grows and it is employing more people. Contracts are going to come out of that value chain for other people. So, though we are not directly the ones driving the production but, by supporting this industry, we can actually see the Niger Delta continue to develop.
So, when you think about the top two states in Nigeria with more internally generated revenue than what they receive from the Federal Government, there are only two of those states: Lagos, where there is gas, and Ogun, Gas too. Then, down the line, is Rivers State where we are also building a gas network. Key message there is that “Gas is a game changer and at SNG we try to use gas to support local industrialisation that tries to diversify our economy”.