Interview with Badari Narayana Srinath, COO of Menergy Group

You are becoming more international now. Menergy has been very present in Côte d'Ivoire, Liberia, etc., but you are going further now. Can you explain what you are doing?

We have now moved into Namibia. We have been there before, but we recently got the opportunity to actually start operations there. We are now providing a catering label for a company called Ocean Rig, not directly, but through Sodexo. In our line of business, we sometimes have to work with our own competitors which we are very open to do based on the type of operation and the needs of the client. Because we provide services of international standards, we have worked with multiple other competitors like Sodexo and ESS who are all in the catering business, but they are all global names. Sodexo basically reached out to us. Sodexo or ESS do not operate throughout the world. They are global names, but they do not have local offices everywhere. So, wherever they need local support, they need to go to a trustworthy, dependent service provider. Mea Catering has worked with ESS in Côte d'Ivoire. They came to us and said they needed support in terms of local content, which is the provision of mainly a local catering label, and could be from stewards all the way up the rank to sous chef, sometimes even the head chef. They provide their own boss, but the remaining staff are all locals who we prescreen, train, and then send to the rig. So, they trust us because they do not have to worry about the training or other aspects because they know that we have served clients to the same international standards as they do.

Who is the final client?

In this case, Ocean Rig is the drilling contractor and the final client is Tullow. Then it will be another company called Chariot Oil and Gas because the rig is going to be drilling for both of them.

How long is the contract for?

The rig leaves in November, so we will finish then. It is not a yearly contract, it is project based. Sodexo has given us the contract, but they are dependent on the project. As long as they have it, we have it. The rig will drill until November, so we will finish then as well in Namibia.

You are also now present in Mauritania.

Under our core Menergy group of companies, we have several different entities. Menergy International is one of the major entities that provides manpower, logistics services, husbandry services, accommodation services, and other procurement and local support.

Mauritania was more of a strategic decision for us. We do not have any existing contracts there, but we went there because we were serving an American drilling contractor called Ensco in Côte d'Ivoire who was also drilling in Mauritania. Because they were very happy with our services in Côte d'Ivoire, they asked us to explore whether or not we could extend our services to Mauritania. We went there earlier this year as an explorative business development mission. We saw a lot of scope for expanding there because there are very few players, but there is a great opportunity for local content, training, and development. There is talent there, but it needs to be brought up to international standards. That is the strategy we have adopted everywhere we have gone, so we saw this as a natural move to go there. We are hopeful and most of the operators tell us that much of the activities will start next year. Mauritania is a promising place because we have four out of the five major oil companies there, including Exxon, Total, BP, Shell; only ENI is not there.

You have also been moving forward with your Mea Catering and Investment branch. Can you explain more?

Under our core Menergy group of companies, we have several different entities. Menergy International is one of the major entities that provides manpower, logistics services, husbandry services, accommodation services, and other procurement and local support. Mea Catering and Investment, on the other hand, provides purely catering and hospitality services, as well as anything related to catering such as food procurement, ship chandlery, etc. We set up Mea Catering and Investment here in Ghana and Côte d'Ivoire. It is not in all the locations where we operate. From a business point of view and in terms of registration of the Petroleum Commission, it was similar to Côte d'Ivoire. We wanted to separate the two business operations. In most other places, it is just Menergy providing all the services. In some places, like Côte d'Ivoire and Ghana, you need a special permit to provide catering services. These are our major revenue generating arms. For example, in Mauritania, Menergy Mauritania does everything. Similarly, in Namibia, we do not have any separate entities as a whole.

You recently moved to Dubai. Can you explain the concept behind.

The office itself was opened in 2014. We moved there mainly because it was a strategic move. For most of our clientele, their regional headquarters for the African region was based out of Dubai. We also wanted to be closer to our clients, which always helps to be closer to the decision makers for the comfort factor. We see a lot of times that with companies in Dubai, the major drilling contractors use subcontracting companies in Dubai who then further subcontract to us. So, it just made natural sense that when they directly know us, we can just be there ourselves and if they need to subcontract, we can subcontract to our own entities. We are not very strong in the Middle Eastern market and we are not doing much active work with clients there. There is a lot of competition there. It is a mature market and it will take us a lot of time to penetrate that market, but that was not our goal in going there. Eventually, if our clients are satisfied with our services, we do not have a problem working in that market.

What is your prospective for this year? Will it be a good year? How do you see the sector itself moving? What are the trends you feel for this year?

Definitely, the second half is looking better than the first half. We do not know if they will materialize or not, but we are getting opportunities to bid, which were not very existent in the beginning of the year. Ghana is picking up with some activity this year and next year. There is a heavy focus on local content, which is good for us. Although, there are a lot of local players, but as we are one of the locals, we have the opportunity to at least participate. Similarly, in other regions, such as Mauritania, it will also pick up. We will know much more by the end of the year, but it points towards the positive so far. We are also based and registered in Senegal. Drilling will start to happen in both neighboring countries simultaneously. Considering that there are bids which are already being launched, people will not take those bids back. It looks to be moving in a positive direction and we are hopeful. If not, in the next three months, we will not get anything because the bids will not materialize. Next year, we are hopeful that our investments in these locations will pay off. It is a risky move, but it is a calculated risk that we have to take.

Is there anything else you want to add about the oil sector in the world or in Africa?

The price has already gone up. How far it will go up, an industry expert can comment more on, which I am not. People who are commenting do say that it can show some slight improvement, but there are many political things happening. In the African region, related to our industry, we do see that the activity is picking up now. There are other factors that come into play when a contract is actually materialized, but we cannot comment on that at the moment. Generally, it does look positive. We are hanging on. We have taken a lot of hits, which is sad. Many good people had to go. We could not renew the contracts of several good people who we wanted to keep because of lack of work, which is still continuing. It is not great yet, but it is much better than what it was at the beginning of this year and the end of last year.

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