Value Microcaps Junior Energy

[JustForFun7]

MMT.V - production capacity of around 45,000 barrels a day


http://www.voicesofnigeria.com/articles/interviews/item/185-interview-with-mr-wade-cherwayko-chairman-executive-officer-of-mart-resources.html


Interview with Mr. Wade Cherwayko, Chairman Executive Officer of Mart Resources
Post 11 February 2013
Rate this item 1 2 3 4 5 (0 votes)
font size Print Email Comment
Tell us about the background of Mart Resources and milestones
I founded the company almost 20 ago. We have operations in many different countries, but the focus of the company for the last five or six years has been Nigeria. I have been in Nigeria for many years and have long been working with Nigerian indigenous companies, being one of the first foreigners to do so; helping them to secure financing and to find technical partners.
What is it like the company nowadays? What has it evolved into?

Because I have been here in Nigeria for a long time, I would say that we had first player advantage when the marginal field program came about, in 2003. This plan from the government aimed to allocate proven fields that were underdeveloped – and own by the major oil companies - to indigenous companies. The problem of these fields is that they were too small for the big oil companies, and the benefit for us was that, thanks to our experience on the ground and knowledge of the local environment, we were able to form partnerships with strategic local companies, and we followed what we considered better assets.

We have been working with our partner, MidWestern Oil & Gas Company Limited and SunTrust Oil Company Limited -, and which are currently running our major operating field. As a company, we are basically a Risk service provider to MidWestern and SunTrust, and the field is currently producing 12,500 barrels a day. This field is by far the best performing one of all marginal fields allocated by the Federal Government in 2003.

Our daily production of 12,500 barrels is not the production capacity of the field, the latter is much bigger than the former but there has been constraints and we are currently experiencing problems with our export pipeline. In order to solve that issue, we have come to an agreement with Shell so that we are building our own new pipeline, already in progress, and that pipeline will go into one of Shell that connects to the Forcados terminal; which will allow us to have a production capacity of around 45,000 barrels a day. We expect to have the pipeline operational by mid-2013, so from now until then we are going to drill a number of oil wells on the field so that when production is commissioned, we will be able to increase our production significantly. Likewise, we plan to do more development and exploration with the license, as well as look for new opportunities like buying some new assets where we see potential.

What are the growth prospects for the company for the next three to five years? Is there a plan already set?

We know that the government is going to allocate more of these fields, so we intend to continue to work closely with our existing partners Mid-Western and SunTrust, or maybe through other partnerships.

We are also looking to acquire assets which the International majors such as Shell, Conocco Phillips and the like may be divestment from.

What is your competitive advantage as a company within the Oil & Gas industry in this country?

I think it is that we have been on the ground for a long time, we respect the rights of the people and we are big supporters of the Local Content Act. Likewise, we have formed partnerships with strategic Nigerian companies, as MidWestern as I mentioned earlier. Therefore, working with local partners and local service providers gives us a competitive edge.

The Local Content Act was enacted in 2010, for you as a company partnering with indigenous Nigerian companies, have you already seen any benefits?

We have been very supportive of indigenous companies and partnering with them even before the Local Content Act was enacted . We have never operated in this country just as foreigners, but we have always partnered with local companies, because we know the way around and it’s also a huge benefit to the industry as it helps to streamline the industry by utilizing more local content, it makes work force from a foreign perspective more stable

Nigeria is the biggest oil producer in Africa, it has 3% of world´s reserves, but fuel shortages are still very common in this country. What should be done to tackle that issue?

Either the government or the private sector will have to put more refining capacity in place, as well as rebuilding the existing refineries. And in fact, the government is already taking the right steps to help develop more local refining capacity.

Nigeria has the highest gas reserves in the whole continent, but gas production is not very developed yet. Is Mart Resources considering venturing into the gas sector in the coming years?

We are not interested in gas as an only asset, but we are more interested in gas associated with oil development. We will only build gas fire power plants, so that our gas is only utilized in fire or generation, and we give power generated back to communities where we operate into their local grid. So we look at it only in association to oil development. But our primary focus will be still more oil than gas.

There is a lot of talk into the diversification of the Nigerian economy to non-oil related activities. If you had to suggest a foreign investor coming to Nigeria where to invest, apart from the oil & gas sector, which sectors would you highlight?

I think this country needs more infrastructure projects, so that would be a good area to explore and invest; office buildings, housing, ports… all sort of logistics projects offer good opportunities. The population in this country is so immense that we need to have more modern infrastructure.

How important is diversification in order to achieve the government Vision 20:2020?

I think that is a good plan from the government, and you need to diversify in order to achieve it. The country is extremely reliant on the oil industry, and in order to grow the economy there has to be more wealth distribution and better infrastructure.

Foreign investors may be concerned because they have heard that this country has a lot to do in order to achieve more transparency, accountability or good governance. What would you tell those foreign investors to convince them that those challenges can be overcome and Nigeria is the country where to invest in Africa?

Foreign investors just need to look at the number of local as well as foreign companies that operate in Nigeria and that are making good amount of money. Even ourselves, as a Canadian company, we are generating significant cash-flow in Nigeria. Therefore, people just have to look at the success stories, and avoid focusing on the negative side that they hear about Nigeria. This country has changed a lot in the last few years, and there are new entrants, especially within the oil industry thanks to the divestments that the big players have done, that are coming here because they have realised this is a place which offers good returns on investment.

How could a foreign investor coming into the oil industry benefit by partnering with Mart Resources?

It makes a lot of sense to partner with people that are already on the ground and understand the local environment, and that know how to work with local communities. Therefore, it is much easier for investors to come here and invest with a local player instead of doing it on their own especially taking into account how competitive it is getting here now, you need to work with someone that has a strategic advantage on the ground and understands the local terrain, and we are one of such companies as far as Nigerian Energy sector is concerned.

You have comprehensive experience of more than twenty years in this sector, across the North and West of Africa, Canada or South America. If you look back in time, which legacy do you think you are leaving behind?

What we are most proud of is that we have really helped to develop local content, so we have contributed immensely by way oftransfer of technology and hands on experience from an independent oil & gas standpoint; and the reason why it was achievable in Nigeria was Nigeria dominated by the major players, there were no independent or strong indigenous oil companies when we started out here. Then, we have brought experience from overseas into Nigeria; we have been innovative and technology-driven, as well as providing fit-for-purpose equipment. Likewise, people now know how to finance these projects thanks to us. So I think we have brought a lot of interesting ideas that have benefited indigenous oil & gas companies.

View Mart Resources OBP


Read more at http://www.stockhouse.com/bullboards/messagedetail.aspx?s=mmt&t=list&m=32183352&l=0&pd=0&r=0&msg=3#7VB91lXtGtqkf6EW.99