Both ambitious in its downstream aspirations and humble as a sound corporate citizen, Rainoil Limited has risen to the fore of the nation’s oil and gas industry. Gabriel Ogbechie, Founder and Group Managing Director, tells its story.
THE PRIDE OF NIGERIAN PETROLEUM
With the 60th anniversary of Nigerian independence fast approaching, a quick reflection upon the country’s modern history transparently unveils what can only be described as a nation on the rise.
Standing as Africa’s largest economy with an estimated population of 200 million and GDP of $376 billion, the continent’s western powerhouse has made monumental strides throughout the past half century, now outperforming the likes of South Africa, Ireland and Hong Kong.
Sweeping opportunities and prospering industries have paved the way for Nigeria’s surge, the African Development Bank citing a thriving service sector and sound economic and political reforms as consistent tailwinds in recent times.
Among the nation’s top performers is none other than the oil and gas vertical. Since the first discovery of commercially available hydrocarbons in 1956 in Oloibiri, a small community located just off the country’s southern coastal border, the industry has grown rapidly to displace the traditional role of agriculture as the nation’s leading economic mainstay.
Evaluating figures from the Nigerian National Petroleum Corporation (NNPC), such growth is clear to see, with the production of 0.184 billion barrels of oil and 2.260 billion cubic feet of gas recorded in 1958 having expanded exponentially during the latter part of the 20th century, with the nation producing 25.93 billion barrels of oil and 158 trillion cubic feet of gas by the turn of the millennium.
Fast forward to the present day and petroleum products now account for roughly 90 percent of all of Nigerian exports, while local oil consumption has similarly reached all-time highs in recent months, evident in the demand of 820,000 barrels per day during May 2018.
DEPICTING DOWNSTREAM EXCELLENCE
A buoyant market to say the least, Rainoil Limited is one company that is thriving in the current climate.
A petroleum products marketing and retail company that was incorporated in 1994, later commencing business in May 1997, Rainoil Limited has successfully risen from modest beginnings, now positioned as one of Nigeria’s leading oil and gas players.
“Rainoil was started from scratch, from ground zero you might say, and we have grown it step by step and brick by brick, a trajectory that has truly made it what it is today,” states Gabriel Ogbechie, the company’s Founder and Group Managing Director. “We acquired our first petrol station in 1997, then launching a second outlet in 1999, and I am proud to say that we have not looked back since.”
Two decades on, the group now encompasses 70 petrol stations across Nigeria, simultaneously having diversified its portfolio through the erection of two 50 million-litre storage depots – one in Oghara, Delta State and the other in the Calabar Free Trade Zone within Cross River State.
“Alongside these two depots, we are building a new integrated multi product storage facility in Lagos which includes storage of an 8,000 metric tonnes Liquefied Petroleum Gas (LPG) and also storage for jet fuels, gasoline and gas oils,” adds Ogbechie.
“Furthermore, Rainoil has developed a substantial logistics portfolio that includes a fleet of one cargo ship and around 100 tank trucks that are used to distribute our products across the country.”
Active in everything from shipping and logistics to storage and retailing, the company has worked tirelessly to position itself as a major player across the entire value chain of the Nigerian downstream sector, selling petroleum products both across its petrol stations and directly to some of the country’s prime industrial customers.
INVESTMENT AND DIVERSIFICATION
Having established Rainoil Limited from the outset, it was apparent speaking with Ogbechie that he could look back at how far the business has come since its inception with a sense of pride, its 20th anniversary in 2017 having provided the perfect opportunity for such reflection.
“We couldn’t help but roll out the drums and celebrate our achievements,” he reveals. “The mortality rates for startup companies are very high in this industry, and when you start with as little as we did people don’t tend to rate your chances too highly.
“What is a true delight, however, is that we have not only managed to survive for over 20 years, but equally we have expanded to provide ourselves with the perfect platform to kick on and consolidate our position as one of the most influential players in the Nigerian downstream space.”
Probed further about how Rainoil Limited was able to rise to the top in such unprecedented fashion, Ogbechie is quick to point to one of the company’s core differentiators. “We never stop investing,” he states. “From one petrol station, to two, to five, to 10, this strategy has remained a constant during the course of our history.”
Most recently this ethos has highlighted itself in the form of the firm’s aforementioned portfolio of storage depots, the organisation having commissioned its first such facility in 2011, then again in 2015, and finally the multi storage depot in Lagos which will hold the 8,000 metric tonne LPG storage facility and storage facility for jet fuels and others that is set to be opened this year.
“This ideal in particular has given us the capacity to be able to weather any new storms as they have come,” Ogbechie continues. “Challenges are inevitable in any industry, from changes in asset prices to economic cycles, but these investments have allowed the company to not only remain ahead of the curve but similarly stand up to any tests.”
Diversification has been integral to this, the firm readily keeping on top of current trends and aligning itself accordingly – evident in the company’s rising emphasis on the growth of regional LPG market.
“LPG demand has more than doubled in Nigeria in the past two years,” explains Ogbechie, “owed to the government’s renewed policies that have been encouraging the populace to use it as a daily fuel for activities such as cooking as opposed to current, less efficient alternatives like firewood and kerosene.”
Acutely aware of this, Rainoil Limited has been readily positioning itself in line with this fast-emerging market, not only through the 8,000 metric tonne storage depot that is being finalised, but equally with its wider plans to develop a second such facility in Oghara, Delta State.
“If I’m completely honest,” the GMD explains, “we are seriously considering rolling out LPG schemes and bottling plants across the country, starting in Lagos and Benin City and then ramping this up in other regions. In our eyes, the future is LPG.
“Gasoline of course remains our main focus as it accounts for approximately 70 percent of our business, but we know that new prospects will always spring up where there are changes in market dynamics, and we will continue to work to ensure we are positioned to take advantage of any major developments.”
MADE BY MANPOWER
Hand in hand with this ethos comes the company’s network of esteemed staff, an employee base constituting approximately 800 innovative, dedicated workers that have each fostered the firm’s progressive outlooks and cultures.
“We are lucky to have such a committed team,” explains Ogbechie. “We are very strategic in our hiring and, much like our training, we take it very seriously.”
Rainoil’s overriding emphasis on this front was ramped up approximately five years ago, 15 years after the business’s inception, as the company’s primary concern moved from profitability to that of sustainability. Engaging Ogbechie’s former employer in the form of PwC, the group extensively re-evaluated its processes, financials, policies and operations, undertaking a number of restructuring initiatives that included a renewed recruitment outlook.
Ogbechie adds: “The initial idea was geared towards looking at how Rainoil would be able to transition from being just another company to becoming a household name of the Nigerian oil and gas industry. Working with PwC, we quickly recognised the importance of having coherent hiring and talent retention strategies in achieving this, and have since been striving to bring first class graduates and similarly promising individuals on board.
“Right now, I’m the Group Managing Director, but it is my belief that each and every member of our team should be willing and capable of doing such a job. Any product or company is only as good as its manpower. It is not the petrol stations, it is not the depots, it is not the products – these things are of course important to our model, but the core successes are down to the staff. Once this comes, everything else follows.”
Advocating this outlook, Rainoil Limited remains competitive in what it can offer to both its existing staff and new talent, providing tailored and progressive career plans, ensuring that it has a team that can more than hold its own within the industry.
SOUND SOCIAL RESPONSIBILITY
Accentuating opportunity within its own structure, Rainoil Limited also actively ensures that the local communities in which it operates are beneficiaries of its presence in a multitude of ways, operating as both an active and admirable Nigerian corporate citizen.
From Lagos to Oghara to other cities, the company has supported schools, orphanages, and healthcare institutions across the country over the years, offering its expertise and finances in providing key infrastructure, community outreach programmes and the likes.
The firm’s 20th anniversary demonstrated a prime example of these practices, with Rainoil having engaged with a broad number of societies as part of its celebrations, while Ogbechie himself is quick to highlight that the business readily partakes in sports sponsorships and runs a corporate volunteer service programme focussed on caring for the less privileged, elderly and disabled.
Asked about the motivations behind these things, Ogbechie responds: “We believe every company should, as a matter of policy and principle, impact for the benefit of local people.”
“As a rule, we try to follow this philosophy as consistently as possible, reflected by the healthy budgets that we regularly set aside for such initiatives. We recognise that our business has only been able to thrive from the support of the communities that we operate in, so it is only fair to share the spoils and help in upholding each of these regions.
“Personally, I am a firm believer in generosity. Sometimes a moment of reflection is all that is needed to see that your own needs are quite small in the way of the bigger picture.”
Having remained a wholly indigenous-owned company throughout its illustrious 22-year history, Rainoil Limited today still plays a fundamental role in bettering both the local economy and society, further reflected by the business’s sound and responsible approaches to health, safety and the environment
Maintaining excellence in each of these areas is critical to the long-term success of the business, a feeling that has resulted in the company’s compliance with leading safety regulations and industry best practices.
From driving awareness and emphasising that safety is a collective responsibility amongst both its staff and contractors, to ensuring that adequate contingency plans are in place and safety procedures are reviewed periodically to facilitate continuous improvement, Rainoil Limited truly remains responsible across the board, externally, internally and everywhere in between.
FOSTERING THE FUTURE
Rainoil’s esteemed employment strategies and sound corporate social responsibility practices aside, the group is expecting to experience one of the most expansive periods in its history to date through the remainder of 2019 and early 2020.
The firm’s ever-heightening ambitions have manifested themselves in the form of its Project 150 initiative, an aggressive growth plan that aims to bolster the brand’s existing presence across Nigeria from 70 to 150 petrol stations over the course of the coming 12 months.
“We are well aware that it is a really challenging project,” reveals Ogbechie, “but we are driving it assertively using substantial investments, and with our team at the helm we are confident that we can establish a footprint in all the major cities in this country.”
Indeed, Ogbechie himself is no stranger to challenges of such a scale having been at the firm from the outset. This being said, the Group Managing Director recognises that new opportunities are presenting themselves in the downstream sector, and that the business must act sooner rather than later to remain ahead of the curve and capitalise accordingly.
Looking at recent statistics from Standard Bank, for example, Africa’s share of total global oil and gas consumption is expected to increase from 4.3 percent to 5.1 percent by 2050, while demand for gas is forecast to increase by 128.4 percent prior to 2040.
He concludes: “Retail outlets will always be the interface between the industry and the consumer. Nigerian people won’t stop refilling their cars at petrol stations anytime soon, and it’s a segment where we want to expand our market share, and become a brand of choice for customers across the country.
“We are working very seriously on our investment programme. It’s costing a lot of money as you can imagine, but we feel that every dollar that’s put in will show its worth as we move into a new and particularly exciting era for Rainoil.”