He comes across, unassuming, gentle, soft spoken, but you will be mistaken if you think that is all there is to the man. Beneath that gentle look, lies a burning desire to dominate his operating space. A thinker, an innovator and disrupter. He crept on his competitors and before they realised it, he had displaced them to reach the commanding heights of competition with his unique service offerings. The next level according to him is to disrupt his own offerings with even more innovation and dexterity. Enter the world of work of Mr. Peter Mbah, Chief Executive Officer of Pinnacle Oil and Gas. He was recently elected the Peoples Democratic Party (PDP) governorship candidate for Enugu State. He has a long track record of entrepreneurship and his experience cuts across various sectors and activities including, import trade, oil and gas sales and distribution, and maritime logistics. He also has his footprints on the sands of public service, having served as the Chief of Staff to the Enugu State Governor and Commissioner for Finance and Economic Development of the Enugu State government in the past. In this interview with THISDAY, Mbah speaks about how his company started off as a tiny organisation in a one-bedroom studio apartment to becoming an industry leader with 23 per cent market share. He also stresses the need for the federal government to fully implement the Petroleum Industry Act so that the country can reap its expected benefits. Excerpts:Tell us how Pinnacle Oil & Gas Limited started off as a company?Pinnacle commenced operations in 2008 and we started off in a one-bedroom studio apartment somewhere on Ahmed Onibudo Street (where used to be known as Princess Court) on Victoria Island, Lagos. It is a block of studio apartment. So, we took a space there. I started it off with about two other guys -one was my secretary and the other was my dispatch man. That was essentially how we started and what we did was largely the buying and selling of petroleum products. We bought and sold products from the terminals and we also got involved in looking at the movement of the market onscreen. In summary, we started from that humble background, what you could describe as zero-base and of no reckoning. But we also knew that we weren’t just another oil business firm. We were clear from the outset, even from that humble beginning. We made our mission clear; which was to distribute petroleum products at a price that is unbeatable in the market, and then, we also envisioned that we were going to play a dominant role in the petroleum products market in Nigeria. In the course of growth, the only thing that changed was that we moved the word ‘Nigeria’ to Africa. It got to a point where we felt that the Nigerian market was not going to be our limit, we started looking at the entire continent as to play a dominant role.
That means from that your small corner, you already had a dream to dominate?Absolutely! And that again became largely the driver of a lot of decisions we made. We knew that this market – the downstream oil and gas industry – was a matured market and we already had dominant players. The market was already distributed. The big players had already captured their shares in the market. The question then for us was: how do you become a dominant player in an already matured market? If you were dealing with an evolving market, a nascent market, it’s easier because everybody is struggling for a market size and companies are trying to capture different segments of the market. But that wasn’t where we were. We were in a space that companies had already taken their positions and had captured their various sizes. So, we knew that growing incrementally was not the option. We knew we needed to come up with a disruptive idea that would help us displace some of the dominant players and take that dominant position that we had envisioned.
What we did was to look at the compelling business problems that existed. We observed that those problems, those challenges existed in the operations space. We observed that the industry relied a lot on multiple handlings of cargoes before they get to the end-user, and we felt because of the cost intensity of those multiple handlings, made it largely inefficient. I mean in terms of cost and also time. And so, we felt that the sub-optimisation needed to be disrupted which was how we came up with this idea of eliminating those multiple handlings by creating what is known as an offshore intake facility, or if you will, what is also described as an SPM and CBM. SPM is a Single Point Mooring system and the CBM is a Conventional Buoy Mooring system. The best way to describe them is like an open seaport – a port in the middle of the sea. So, just like you have ports for dry cargo by the shore, the difference with this is that we had to do a subsea pipeline of about 40km network of pipelines.
It is subsea, so it’s beneath the seabed. We did that and have what is also known as a pipeline end manifold that sits on the bottom of a sea – where you tie in the pipes that connect to your terminal from the shore, and then you connect your hoses that would hook up to the manifold of the vessel on the same pipeline end manifold sitting on the seabed.
These are complex engineering that require a whole lot of data and survey in order for you to even commence the design. But we knew that this was radically going to change the face of the industry. It was going to be a major changer. So, it took our attention away from those huge trading that our colleagues were doing at the time because we knew that ultimately, it was going to be a quantum leap once we got it right. So, we persevered, we carried on. To cut a long story short, by March last year, we operationalised one of the mooring facilities – the CBM. That became operational in March 2021, and by September, what we had envisioned became a reality.
We became the market leader by market share and also by volume. We were able to launch this facility that allows us to turn around what typically takes the industry 30 days (the volume that a typical marketer will require 30 days to do), is what we can do in three days. The reason is that those large tankers that normally have to come with shuttle vessels to light at the mother ship, could easily moor at our facility in the open sea, discharge from that point to our terminal. And we have also constructed the largest storage facility in the country. We started with a 300 million litres capacity which is poised to be increased to over a billion litres. That design is already done, the approval got, we are just in the process of implementation now.
How long did it take from the time you envisioned dominance to actualising and achieving it? So, looking back at when you took that decision to getting the mooring facilities in place, you must be delighted that you took that decision? Yes, we are excited, and I think that we are just at that position any company would love to be in its industry. Because we are not a company that is basically in a bandwagon kind of thing, where people are already in, you have everybody doing the same thing. At some point, what was fashionable was people trading, going of course, to increase their retail footprint and doing trading, which is on its own not bad. But again, it’s a function of what role you want to play in your industry. If what you wanted was to grow incrementally and to just keep growth rate at maybe, five or six per cent, which is on its own, a beautiful growth rate by any standard, you will be fine. Increasing your retail footprint might be a good strategy for you. However, if your corporate objective is to play a dominant role and that’s your long-term goal, then you must begin to craft strategies that would enable you play that dominant role. Except you only want to pay lip-service to that thing you have envisioned.
If you truly want to become the dominant player, that means you want to be the market leader.
