On the Right Track

This interview was published on Africa Oil & Power.

After successfully completing the first half of its contract for the Alen Gas Monetization project earlier this year, K5 Oil Center’s general manager, Frida Ndong, speaks to AOP about the company’s commitment to achieving strong results for the second half of the project, while operating under ‘new normal’ conditions in Equatorial Guinea.

What have been the key developments for K5 in the past twelve months, giving particular weight to the state of emergency produced by COVID-19?

At the end of last year, K5 was awarded by Noble Energy to be the logistic center for the Alen Gas Monetization development project. This has been our biggest development in 2020. Most of our resources from the beginning of 2020 have been focused on this project. We developed a storage yard of over 55,000m2; we have completed already the discharge of 5,864 Coated Pipes (40,000 tons) and we are currently preparing for the load-out of the pipes. So far, our participation in the project has been a success and we are very much committed to achieving the same results on this coming second part of the project. The state of emergency caused by COVID-19 has been an added challenge, but we have been quick in implementing all sanitary measures and protocols as stated by the World Health Organization and the government.

What initiatives has K5 implemented to mitigate the consequences of the pandemic, and how would you evaluate the efficacy of such initiatives thus far?

All measures to prevent or mitigate the consequences are very well known at this point, from the use of facemasks to social distancing and hand washing. Further initiative was to strategically place additional hand wash stations all around the base and to increase awareness. We have limited the entrance into the base to only clients and border control authorities and have implemented temperature control for all who enter the facilities. These measures have proven efficient so far as we have been able to carry out our operations. We believe that we are in the right track, but we must remain cautious and alert.

As many operators stop or delay work programs in 2020 due to the crisis, what impact will this have on K5 and the greater logistics sector?

K5 and other logistic players will have to adjust to lower activity. Companies will be looking to preserve their cash flows and also delay capital expenditure. It is also a good opportunity to perform internal evaluations, reduce waste, thus making the company leaner and more efficient. The main goal is to come out of the pandemic crisis with capabilities, so that K5 can have a stronger approach to future projects. Nevertheless, we are confident that the market will pick up eventually.

Since Equatorial Guinea is predominantly an offshore industry, this poses a number of logistical challenges in conducting health screenings, rotating crews, halting production, etc. How has K5 adapted to the current COVID-19-induced restrictions on travel, security and safety?

K5´s staff is composed of 90% national workforce, so the restrictions on travel are only affecting a minimum number of our staff. The response from our staff has been outstanding, we are adapting to the new circumstance for as long as needed and we hope that things go back to normal soon.

The Ministry of Mines and Hydrocarbons (MMH) recently announced the provision of two-year block extensions for some operators. How can fiscal and legislative reform be extended to service providers as well?

It is important during a crisis that the governments provide stimulus to the economic operators. Any measure that can help the operators will eventually have a positive impact on the services providers. It certainly will be a big help for the industry in Equatorial Guinea to have a prompt recovery, and our expectations are for things to come back to a normality in short medium term. Fortunately, the MMH is willing to look into the service providers’ proposals, so I am confident we are on the right track.

How would K5 characterize its outlook for 2020 and beyond?

Challenging, in many ways. We constantly hear about a “new normality,” but its effect and how it is going to affect our line of business is still to be seen. Governments and the oil and gas industry are adjusting to the new reality with the goal of stabilizing the oil market. That will help to bring confidence back to the industry. Confidence is crucial for investment and looking further ahead we are looking at developments with the MMH, namely the list of projects available to invest in Equatorial Guinea. Following a successful Year of Energy, we believe the government will be successful as well in attracting more investors through the Year of Investment. The Gas Mega Hub vision is already underway, and K5 looks forward to the remaining phases.

Established in 2001, K5 Freeport Oil Center (K5) is a certified Freeport that provides logistics support for offshore drilling operations and companies located in Equatorial Guinea and along the West African coast. K5 works closely with Universal Africa Lines (UAL) shipping company, which carries 40 years of logistics experience in West Africa.

The opionions stated in this piece are those of the author.