With over 400 years of history, VOPAK is the leading independent warehousing and logistics company in the world. Imagine how the Oil and Gas industry would be without the services of VOPAK to the many sectors of the industry.
In my last editorial on Nairametrics, which focused on the current trend of deregulation in the Downstream stream sector of the Oil and Gas industry of Nigeria, it was emphasized that players within the industry should start looking into creating the needed partnerships towards building the right synergies in order to attract the needed investments for infrastructure development.
Looking at the VOPAK model, I believe that the key to a successful deregulation of the Nigerian downstream oil & gas sector is hinged on the investments brought into the sector by the warehousing and logistics players such as those under the umbrella body DAPPMAN.
This is true because over the last two decades, their investments have been very instrumental to the expansion of the sector as they have played a major role in ensuring the adequate holding and distribution of products across the country.
(READ MORE:How to access CBN’s N250 billion intervention fund for gas sector)
Their investments in this sector has helped in supporting the supply of products across the country, as their facilities have provided the needed warehousing infrastructure for the increased usage of products over the period, thereby ensuring security and transparency in the movement and distribution of products for the major providers of the product e.g. NNPC.
As more warehousing and logistics partnerships are beginning to take shape, more players are starting to better understand the need for increased efficiency within the value chain, thereby improving reliability and sustainability of the sector.
By so doing, they have started to plug many of the inefficiencies within the value chain by creating a Supply Chain Management System needed for an efficient value chain system from marketing through retailing to the final end users.
As one who spent over a decade in the Oil & Gas Industry, I have seen the immense value add of the warehousing and logistics companies to the overall growth of the industry and like VOPAK are the most crucial and essential aspects of the industry, be it upstream, midstream and/or downstream.
The same would go for our country where the players – Public and Private – must work together to ensure that the policies that will drive the required investments in the warehousing and logistics arm of the value chain are carefully articulated so as to allow current and future players in this arm of the oil and gas industry attract the right and required financing that would drive the efficiency of the industry.
(READ MORE:Petroleum Industry Bill set to go to President Buhari)
It is quite pertinent to note that sectors of the oil and gas industry such production, trading, refining, marketing, and distribution would be grossly inefficient without key investments in warehousing and logistics – Tank Farm Storage and Pipeline Networks.
The evidence is noticeably clear even in the regulated dispensation that warehousing and logistics companies have been extremely instrumental to the ability of Government to reach many parts of the nations considering the huge increase in the use of oil and gas products in the last three decades. This also include the major strategic infrastructure development and investments made by warehousing and logistics players.
It is without thinking too much and seeing too far that I can confidently say that for a successful deregulation process in Nigeria, players in the warehousing and logistics arm of the sector must have a crucial and strategic seat on the table.
This is because their investments in providing their services to the entire value chain is so essential across the country through storage and pipeline network facilities in order to ensure that products move freely and efficiently across the nation as well as for exports once we are able to optimize and actualize the potentials of the industry.
(READ MORE:Has petroleum product deregulation finally come to roost?)
In conclusion, looking at the huge strides and footprints of VOPAK – (5,107,541cbm¹ in the Americas, 15,543,595cbm in Asia & Middle East, 2,832,556 in China & North Asia, 10,934,973 in Europe & Africa) – A total 34,418,665cbm and sixty-six terminal of warehousing and logistics facilities, like the saying goes “IT IS NOT ROCKET SCIENCE” neither would it be far fetched to say that the key to a successful deregulation in Nigeria would rest on the shoulders of warehousing and logistics players current (SUCH AS DAPPMAN) and potential in the industry across the entire value chain – Upstream to Downstream.
Like the title of my last article “Has petroleum product deregulation finally come to roost?”, well in my opinion the key to its successful roosting would be significantly impacted by the seat offered on the table to players in the warehousing and logistics arm like DAPMAN.
¹ – cbm – Cubic Meters
Article written by Uade Ahimie. Uade is a chartered accountant and corporate governance implementation expert, with almost 3 decades of working experience in oil and gas downstream and upstream, banking and consulting.
He is also a member of the Nairametrics Editorial Board.