GE’s new President and CEO of Sub-Saharan Africa for Oil & Gas, Ado Oseragbaje, is optimistic about the future of GE in enabling and developing an industrial economy across the SSA region.
“People sometimes believe that localisation drives up costs, but that’s not true. We have to understand the obstacles that contribute to the increase in costs. One of the obstacles in Nigeria, for example, is the erratic supply of electricity which affects local manufacturing. There are also issues in the region around taxation, fiscal regimes and import, export costs that add to the overall project costs,” said Oseragbaje, who believes that addressing these structural issues will have a positive impact on overall project costs.
GE’s philosophy is that localisation is worth investing in. This thinking has seen the complexity of supply chains reduced, costs of transporting parts decreased and the creation of jobs having a positive impact on local economies. GE recently built locomotives in South Africa and given that a high percentage of the leadership team was made up of business leaders from the SSA region, this proved that localisation was having a positive impact on the development of skills in Africa.
“We have to start somewhere and if we don’t, then 30 years from now, we’ll still be having the same conversation. There will be marginal increases in cost as you try ramp up, but thereafter, you would have built up sufficient competency to compete on a global scale,” said Oseragbaje.
GE manufactures its “Subsea Christmas Trees”, which are used for shallow water and deep water oil drilling, in Aberdeen, Brazil, Luanda, Australia and in Onne, Nigeria. “Onne is one of five places in the world where we are able to do this. It took us about two-and-a-half years to build this capability in Nigeria. We went ahead and made the investment, and the next step is that we get to a point where we can bring trees from other countries and refurbish them in-country for Nigeria,” said Oseragbaje.
GE considers SSA to be one of the fastest growing regions, which has significant opportunities for the development of products and services across its energy sectors.
From a resource perspective, Nigeria and Angola are considered to be two of the most interesting places on the continent due to their significant resource bases. “The challenge is to create the right enabling environments that allows companies to get excited about investing in these countries. All industry players have to work together to come up with models that bring development costs down, but which also ensure that projects are still viable.”
When asked about the future of the oil and gas industry, Oseragbaje said that GE was a digital industrial company that was constantly evolving. He noted that innovation was taking place across GE’s businesses and that the company had hired 1,400 software professionals at its digital headquarters in San Ramon, California to ensure that Predix, its industrial operating system, became a useful tool for all GE customers. “Ultimately, I think the battle will be won by whichever companies are able to provide executable answers. It’s not just about the data being collected, but more importantly, it’s about what you do with that data and the recommendations that you are able to make to your clients to save money, or streamline processes, or utilise resources more efficiently.”