Indigenous oil companies in Nigeria are positioning themselves to acquire lucrative oil leases ahead of planned $12 billion asset divestments by International Oil Companies (IOCs) which is only18 months away.
Since 2010, three IOCs, Shell, Chevron, ConocoPhillips, have divested 24 Oil Mining Leases (OMLs) worth $10.78 billion which 13 indigenous exploration and production companies acquired with loans from consortiums of local banks.
But many of these assets have ran into murky waters due to low oil prices, over valuation, lack of technical and financial competence to operate them and over politicisation of the process.
In view of this, Aspen Energy Limited, an integrated energy company organised a round table discussion on July 11, with stakeholders on strategies to grow Nigerian independents to World Class E&P companies and take advantage of future divestments.
Austin Avuru, CEO of Seplat Production Development Company who gave the keynote address charged operators to deliberately set out to build capacity in a manner that can transform their companies to world class companies with structures, procedures and processes.
Avuru listed good corporate governance structure, diversified portfolio with multiple sources of income and varying risk profile, sustainably growing production and reserves as factors that will make local producers competitive.
“At Seplat we created a board that can remove the CEO if in their opinion the CEO should not be in office, a board that can remove the chairman if in their opinion he should not be, then you have a board.
“If you have a board that can remove the CEO or Chairman when in their opinion they are not fit to be in office, then you have a board. But when you a typical Nigerian board that is only symbolic and is answerable to the CEO and the Chairman’s wife, it won’t take you anywhere.
Other factors according to Seplat boss include operational excellence, well-balanced workforce and competent workforce and the best health safety and environment practices would help independent producers position themselves for future divestments.
“You will have to get away from hiring your nephew and nieces and friends and children of friends, a competent work force is the heart of a company, you really have to deliberately go out to look for the best in your field.”
In his remarks on the lessons learnt from the recent divestment, Lai Fatona, managing director of ND Western said that acquisition of the assets by indigenous operator was a catalyst for the Nigerian oil and gas industry to grow itself.
Fatona lamented the fact that Nigeria has not benefited from backward re-investment of over $10billion made from divestments made in the last 7 years indicating the need to reform Nigeria’s fiscal regimes.
Bayo Opadere, chairman of Aspen Energy, in his welcome address said the roundtable was meant to be a rallying point to articulate energy issues to realise the potentials in Nigeria’s oil and gas industry, emphasising that the potential will into be realised unless the silence around salient issues in the sector is broken.
Local producers were also urged to focus on the role oil and gas can play in the development of the economy and begin to think global.
“You need to be aware of issues occurring globally and how they impact your business, “said Osten Olorunishola, a former DPR director.
Isreal Aye, energy lawyer and director of Aspen energy also called on indigenous producers to bring their own ecosystem to bear much like the IOCs did when they came into the country to impact the economy.
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