• Saturday, April 20, 2024
businessday logo


Nigeria’s petroleum industry ripe for indigenous crew change – Okoroafor

Nigeria’s petroleum industry ripe for indegenous crew change – Okoroafor

Emmanuel Okoroafor is the executive director, Hobark International Limited, an integrated oilfield service company. Okoroafor pilots the business of the Hobark International Limited from its offices in Mayfair, London, and in this interview with PIUS DUKOR, during the SAIPEC 2023 Conference, he outlined templates for training technical personnel for the Nigerian Petroleum Industry, growing capacity of local companies, and taming inflation in the nation’s economy. Excerpts:

The upstream petroleum industry is transitioning from international oil companies (IOCs) to indigenous. How do you think Nigeria should manage the challenges associated with the emerging crew change?

I think we have many suitably qualified Nigerians who have been trained and exposed to the global industry. Their experience and expertise will enable them to run the show if given the opportunity.

Yes, it is true that some of the big companies like Shell, Exxon, Schlumberger, and Halliburton have, from time to time, brought Nigerians to run their operations in-country. However, these guys come with a background of opportunity, whereas there are people who do not have that background but are suitable for the job.

In Shell for instance, a person in leadership will come with a background and mentality of corporate Shell. However, people often prefer someone from a local service company than the IOCs. This is because the training they get from these companies and the world they have travelled, makes them deal with issues like businessmen. But under the clout of the IOCs, the system propels itself and you are only an administrator.

I believe that Nigeria is still good where we are, now. The IOCs can go ahead to make their money. However, they can do that by getting Nigerians to take up the management of both IOCs and independent operators. That way, we can prepare for the inevitable crew change.

There is the longstanding problem of retraining fresh Nigerian engineers in the industry? How do you think the industry and government can help the tertiary education curricula to enable Nigerian graduates to hit the ground running?

In my days, before you graduated from any technical field of study, you go on an industry placement, that was made to form part of your citation before graduation.
The host company had the responsibility to evaluate you, and if you were good, they will make you an offer upon graduation.
So, apart from the training you got from the university, the industry placement provided you with the necessary tools.

If you learn something today, it is for a task today; for tomorrow, you need to tool up!

Therefore, for Nigerian graduates to hit the ground running, they must undergo industry placements because they need hands-on training. They need industry placements in companies or agencies. These companies or agencies will provide them the opportunity to participate in ongoing projects. By so doing, the students will gain the tools needed, both in practice and in communication.

So, in essence, in preparing them for direct entry into the industry, there are two ways to go about it. One, is to send them to some of the training bodies; either PTDF or PTI. The other way is to equip the universities, in such a way that an engineering student is involved in engineering projects within the university.

The theoretical studies in class will be put to work in real projects. Then, in their third year, they can go on industrial placements organized with the institutions. The companies they work with would write back to the universities, sharing details of the performance of the students. This is the way most present-day oil workers and executives got their jobs in those days.

The likes of Schlumberger, Shell and others go to the universities to interview students, offer them industrial placement and most were offered jobs at the end of their studies. We can make it happen again.

Every industry is aligning with new global standards on governance processes, technological innovations, and environmental responsibility. What gaps can we fill locally to tame the mentality of going elsewhere to upscale?

That is a great question. The industry in Nigeria and the education institutions should work hand in hand, just as, the Robert Gordon University- Aberdeen, the Heriot Watt University-Edinburgh, and other institutions in the United Kingdom.

What happens in these other countries, is that the government and the industry work in collaboration with the universities, to fund research programs that provides innovations and new solutions to industry operations. You do not see graduates from their universities going somewhere else to learn something about oil and gas because it is part of the programme. The same thing could happen here!

Universities like the University of Port Harcourt and the Federal University of Technology, Owerri, have very good engineering programmes. But how many companies from the industries in the country give them the required collaboration? That is what is lacking!

In Nigeria, collaboration is difficult, especially among the hundreds of private trainers and associations. Is there any role you think the regulatory bodies can play in harnessing internal resources and creating efficiencies, that will solidify these OGTAN companies into Centres of Excellence for the industry?

Centres of excellence are good. But you do not form them outside existing structures.
Warwick University in the UK is a world centre of excellence for manufacturing which is funded by prominent organizations including Rolls Royce and the British Aerospace. It is the same thing with oil companies and institutions in the US.

However, in Nigeria we like to create new units that are politicized and staffed with cronies, relatives, old boys and so on, to the extent that these institutions lose their primary focus.

We already have centres of excellence like PTDF and the one established by Hobark. Yes, Hobark in collaboration with Halliburton and the Akwa Ibom State Government, set up an Oil & Gas Training & Research Centre in Uyo. That cost us a lot of money. But it is not being used because the PTDF set up another one in Port Harcourt.
In Nigeria, everything is duplicated. We must copy good things from others.

My point here is that we should stop creating all these new things! For instance, it would be wrong to keep a centre of excellence for gas monetization inside NNPC. Keep it inside a university, in the industry hub, for it to be effective in delivering the national aspiration for the gas industry.

So, in my opinion, the most effective way to groom trainees for the petroleum industry is to use the universities. I sited the University of Warwick, as an example. The University of Cambridge also has many centres of excellence, same with Imperial College. The students passing though these centres are the masters of the future. Therefore, what we need, is to do the right thing using existing structures.

This issue plugs into the raging debate about the recommendation for replicating the successes of the Nigerian Content Development and Monitoring Board (NCDMB) across all sectors of the economy. There are differing positions about having a central regulator, having multiple local content units across all MDAs. How do we have a single local content regulator that works?

There is always the tendency of over-concentrating attention and burden on a system that has proved impactful. The NCDMB or its current Executive Secretary has proved efficient and effective in oil and gas. If we overburden him with other units from all the MDAs in the country, the agency would either be too powerful, distracted, or corrupted.

I think for now, to avoid such, we can retain what we have at the NCDMB, so that it will continue to set the standard for other sectors.

The NCDMB has become a success. Other agencies and their local content models, be it cabotage or anything, could still be successes. But we must be careful how we bring them all together.

The NCDMB will soon open industrial parks and of course, some people will expect free rent for a few years, and if care is not taken, they can take it for many years. However, this can also lead to an industrial innovation centre of excellence in Bayelsa State, where we have robust industry operations. The young generation of Nigerians, instead of going to Aberdeen, would now go to Bayelsa.

Other countries like UK, also practice local content. I studied in France as a post graduate student. The French has local content law, and sometimes we confuse it with racism. The Ministry of Interior and the Foreign Ministry are the regulators because they are the ones that issue the permits. The slogan was: ‘Jobs first to the French and after the French, to the francophone countries.’ This was before they became part of the EU.

They know they control domestic unemployment by exporting their human capital all over the world, especially to the francophone countries. So, they never ever mention their local content to the global community. They keep it quiet.

The NCDMB, and Engr. Simbi, have tried. But we need to carefully tone down its voice on the international stage. Nigeria is the greatest exporter of human capital in Africa. Tomorrow, other countries, even within AfCFTA, may adopt stringent local content laws that would require our people to leave. Foreign nations that began local content policy never mentioned it. You would normally encounter local content restrictions only when applying for visa or work permit.

Going back to the main question, a big organization is not the way.

Let’s turn to the service side of the crew change. Big service multinationals like Halliburton, Schlumberger, KBR, Bakers Hughes, and others are giving way to local companies like Oilserv, Oildata, Hobark and many others in PETAN. These local firms are not beneficiaries of PTDF or other capacity building agencies that have gulped down billions of dollars. How do we manage interventions to deliver on real local capacity growth?

If the government of the day acts in the interest of the country, strategies must forge inter-agency collaboration on local content policy implementation. There’s nothing wrong with the Ministries of Interior and the External Affairs providing diplomatic and political backing to the NCDMB. They know who to let in and who not to let in under the provisions of the NOGICD Act 2010.

Yes, Oilserv, Vhelberg, Hobark and others – these guys worked hard. Nothing was given to them on the platter of gold. Why do I say that? If they had gone to the federal government, they wouldn’t have gotten anything. They came together and formed PETAN. The NCDMB is a recent phenomenon. These guys really fought hard on themselves, and they are progressing.

Now, what they need to do is to continue in their struggle and carry along other young Nigerians. In Nigeria today, if you wait on the federal government, no help will come your way. So, our local service firms should study and learn from the big multinationals. I can tell you that.

The big organizations: Baker Hughes, Schlumberger, Halliburton, and others started as small companies like the PETAN companies. But different companies came together to form these mega companies through mergers and acquisitions, that now dominate the world.

In Nigeria, we have over 200 companies competing for the same thing! So, I hope that someday, organizations like Oilserv will merge with another EPIC company to grow in size and capacity.

In Hobark, there is an internal consolidation among the subsidiaries. The internal cross patronage retains capital within the group. So, other PETAN companies can explore the growth route through mergers and acquisitions.

Merging will sustain the gains we have achieved locally, mainly by internal growth. And pursuing inorganic growth requires the mentality of sustainability which entails that you bring other people that share the same dream of driving the business to sustainable growth.

A successful merger must come in such a way that the businesses with related interests come together to complement one another. This will sustain what has been achieved and leads to continuous development.

At SAIPEC, you will notice that there is a pattern of growth among the indigenous service companies. They have all attained some level of growth, but their growth is still very fragile. If you have something that you think is overgrown, then you must integrate into a larger group. There is no need carrying it along. If we want to compete with international companies, we must think, and act like them.

Finally, sir, what is wrong with Nigeria? Why is growth so slow paced?

The main problem is our choice of leadership. We choose the leaders that we want, and they deal with us the way they think we should be dealt with. We don’t have a very progressive mindset in Nigeria. If someone’s interest is protected in what he sees wrong, he allows it to happen. That is not right. But if we insist on what is right, then everybody will benefit from the process.

Read also: Subsidy removal will heighten demand for renewable energy – Expert

So, we need to reset our mindset. This will make us choose good and honest leaders, over leaders that promise heaven and deliver hell.

A good leadership can address all the things you asked me today. A good leadership would have taken the appropriate course of action by not building new universities but going to existing universities and trying to improve them.

Also, there is urgent need to bring down inflation. My mom brought us all up with her small salary as a schoolteacher in Aba, years ago. Our father died when we were very young, but she was able to do that because inflation was not what it is today. She was not a trader and she refused to remarry. She did it all alone with her meagre salary.

So, a good leader would control the economy in such a manner that salaries would solve family problems; and low-income earners are empowered to take family responsibilities.

Right now, in the UK, people are asking for higher salaries because of the inflation. But if you give higher salaries, the inflation will respond to that. So, the UK Government and Central bank are trying to bring down inflation, not pay higher wages. This is a sustainable way to restore value to the wages of teachers, miners, railway workers.

So, all the things we talk about boil down to enthroning good leadership and reorientation of national mindset. Resetting the national mindset is a function of well-orchestrated civic orientation which must be inculcated in the citizens from early age.