Energy Capital & Power spoke with José Luis Dougan, Managing Director of CERTEX EG about the company’s core service offerings, its role in the regional energy sector, and how it is both facilitating and supporting economic growth and diversification.
How has CERTEX EG evolved its core service offerings since its inception?
CERTEX EG has been operating in Equatorial Guinea for over 20 years. In 2001, our Founder and Chairman, José Dougan Chubum, decided to have a physical presence in Equatorial Guinea due to the opportunities that were identified in the oil and gas sector early on. He understood at the time that there was a great shortage of stakeholders who held the necessary capabilities to operate effectively in the sector. Therefore, his goal was to strategically participate in the sector by starting a lifting and rigging inspection company which offered services such as supply of lifting equipment, manufacturing of wire rope slings and inspection services.
Our strategic approach and goal was to be actively involved across the entire supply chain by offering turnkey solutions for the likes of Noble Energy, Marathon, GEPsing, Trident Energy and ExxonMobil, to name a few. We are proud to have played, and still play, a key role in the industry by ensuring all lifting equipment in circulation is fit for use. We are truly proud of our development as a company and believe we have developed our services to be aligned with the needs of our clients and customers.
Give us an example of how some of your core products are used in the oil and gas sector.
The overall goal of CERTEX EG is to ensure the safe use of all lifting and rigging equipment both onshore and offshore. To achieve this, it is our duty to ensure that we work in accordance with the Lifting Operations and Lifting Equipment Regulations. Such regulations emphasize the importance of individuals and companies who own, operate or have control of lifting equipment within their operations. Therefore, as part of our core operations, it is critical that all lifting equipment is fit for purpose. This includes ensuring all equipment is appropriate for the specific lifting operation, suitably marked and inspected periodically to determine the integrity of the equipment and safety of the end user. We are passionate about what we do and are always seeking to enhance our quality management systems by working in accordance with the highest international standards and practices.
CERTEX EG is a proud member of accredited bodies that play a critical role in governing and regulating the services we provide. Take, for example, the fabrication of our steel wire ropes that are used for the transportation of cargo carrying units: we have to critically calculate the appropriate safety factor of the sling, the size of the wire, the working load limit, and the type of finishing required when fabricating slings and ensure all components have their certificate of conformity. As a result, the example that I have just outlined above not only enables the slings to be used safely but also guarantees the durability, resistance and strength of the slings when transporting equipment onshore and offshore.
What are some of the factors that have enabled Certex to earn the trust of major IOCs?
Our reputation has been built on the basis of our ability to deliver quality, excellence and assurance over the last 20 years. We have understood the market dynamics and the challenges our clients face to serve them better. Our perseverance and willingness to continuously improve our services and become an anchor of support to the operational activities of our clients has positively contributed to our reputation as a company. We are always looking to improve ourselves by adopting quality management systems, training and ensuring that our service excellence reflects the standards we adhere to. Although there are multiple factors that contribute to the overall success of CERTEX EG, the areas which I have referred to have played a key role since our inception.
With that being said, the support of our employees and suppliers has contributed to our overall success. From the back office to our field engineers who render our services, we have established an efficient business structure full of dynamic employees at all levels of the organization.
What new businesses are you looking into here and on a regional level?
Our goal is to be the leading lifting and equipment supply company in Equatorial Guinea and across the region. We believe that our competitive advantage has enabled CERTEX EG to partake in the overall development of the oil and gas industry since 2001. Our strategic outlook and plan is to promote the local market by establishing a one stop rigging and lifting equipment shop which has the capacity and equipment requirements to meet the demands of our stakeholders and encourage local trade into the economy. We hold strategic commercial relationships with companies such as George Taylor, Crosby and William Hackett who are highly reputable manufacturers of lifting and rigging equipment worldwide.
Furthermore, as part of our continuity program we also plan on establishing a rope access training facility that will further develop human capacity in the oil and gas industry. As a result, this will promote local content and build local rope access technicians to handle onshore and offshore projects. At this moment, all of these projects are being rendered by foreign companies. However, one of our primary goals is to organically enter the rope access sector as well as boost our local content participation.
What you see as CERTEX EG’s position in supporting the process of economic growth and diversification and the recovery of the energy sector?
It is true that the entire global economy has suffered from the effects of the COVID-19 pandemic along with the drop in global demand. Such impacts have contributed to the slowdown in business activities as essential measures were taken by the government to contain the crisis on a local level. However, crisis aside, the Equatoguinean economy is still expected to grow by 2.6% in 2021 based on the completion of upstream projects such as the gas monetization, drilling campaigns from IOC’s and discovery of base metals on the mainland.
Whilst Equatorial Guinea has demonstrated her capacity and resilience, the economy still faces economic risks beyond the pandemic. Economic diversification is fundamental to the economic development and as the government prepares to enter the second phase of the National Development Plan, the participation of the public and private sector will be key.
My perspective for the future ahead of the pandemic is for the private sector to build the capacity to invest into the local economy. This can be achieved by promoting and investing into small to medium sized companies that focus on reducing net imports for domestic goods and services. The public sector will also need to continue attracting foreign investments by creating a robust business environment through the establishment of both fiscal and monetary policies. Projects such as the gas monetization and the acquisition of Noble Energy by Chevron shows the country’s strategic outlook in meeting domestic demands while also attracting international players. As for CERTEX EG, our contribution to the economic recovery is focused on expanding our presence, promoting local partnerships and investing into the local economy.
What, in your opinion, has been done right so far in Equatorial Guinea and what needs to be done differently to further accelerate the growth of companies such as CERTEX EG?
His Excellency the Minister of Mines and Hydrocarbons is correct: Building local capacity is one of the key pillars that will support the strategic outlook for economic development. Equatorial Guinea has been able to build a robust economy which holds enormous opportunities across multiple sectors. In 2019, Equatorial Guinea’s economy exported an estimated of $4.49 billion while imports rose to $1 billion resulting in a positive trade balance. Although such economic indicators demonstrate the strength of the economy, I believe the involvement of key local stakeholders is fundamental for a sustainable growth. Thus, buying locally and producing locally will stimulate domestic trade, reduce import dependency and encourage competitiveness domestically. For these reasons, having sound industries will achieve His Excellency’s vision for local companies’ participation and as a result, will reduce import dependency and lower prices for goods and services while encouraging domestic consumption.
In addition, we must also understand that as the global economy becomes more integrated, Equatorial Guinea’s trade policies will be key in protecting infant companies from aggressive trade tactics which international competitors may employ to gain market share and diminish local companies in an attempt to monopolize the local economy. Mechanisms such as tariffs can also act as an incubator that theoretically protects local companies and gives them time to properly nurture, develop, and grow into competitive entities that are able to compete.
However, being in a globalized world, the importance of establishing strong multilateral and bilateral agreements with other countries will be fundamental to promoting local companies. Lastly, strategic investments will be needed in critical areas that stimulate participation of local companies who carry the capacity to add value across the supply chain while allowing infant industries to grow.
The new terminal at Malabo International Airport could position Equatorial Guinea as a regional aviation hub. Given your previous experience with clients in aviation, to what extent can Equatorial Guinea be a catalyst for regional trade and investment in the near future?
The aviation sector is one of the main drivers behind globalization which again is a key sector for economic development. As we become more globalized, domestic and international connections become paramount in supporting economic growth and activity. As of today, the global aviation industry represents 65.5 million jobs worldwide and accounts for $2.7 trillion in global GDP. Therefore, the introduction of the new terminal will act as a strategic bridge to enhance economic development while building efficient aviation connectivity. For example, the transformation of Ethiopia into an aviation hub which supports international trade, robust connectivity domestically/international but built using robust infrastructures that continues to connect millions of passengers worldwide.
In addition, in order to achieve the goals set for the industry, the need for public participation will be key for delivering economic and social benefits through the promotion of intercontinental links will further shape Africa’s aviation sector. That said, Equatorial Guinea holds the right characteristics to become a regional hub in Central Africa due to its size, strategic positioning and robust environment. His Excellency, President Teodoro Obiang’s vision for an integrated Equatorial Guinea will position the country as a logistical hub which holds the correct capabilities to service the inflows and outflow of trade and passengers.
The African Continental Free Trade Area (AfCFTA) has also been designed to create the largest free trade area in the world. Therefore, domestic policy reforms will be a key driver in the transformation of Equatorial Guinea into an aviation hub. Furthermore, it should be also understood that through the the reshaping of the aviation sector the local economy and its stakeholders will benefit from the potential influx created through combining the fragmented element into a single marketplace for services, goods, business, and investment.