The Anglo Dutch Major Provides The Stock Of Chief Executives For Most Of Africa’s Leading Independents…
By Toyin Akinosho
WHEN AFREN ANNOUNCED FIRST Oil from the Okoro field in south eastern Nigeria in June 2008, the company had existed only for four years.
The managing director of Afren Nigeria, the company’s heartland, at the time, was Egbert Imomoh, a former Deputy Managing Director at Shell who had worked briefly in London after retirement, before joining the board of the new company founded by Liberia’s Ethelbert Cooper.
For a company formed by a mix of African and outside investors-even if listed in Europe-the timeliness in arrival at first oil was quite significant. The field produced 3,000BOPD from one well, while it targeted 15,000BOPD from six wells by the end of that year. (Afren now produces in excess of 50,000BOPD operated). In terms of having African businessmen launch a company and utilize indigenous human resource capacity to deliver first oil, Afren was following-at that time- on the heels of Conoil, Niger Delta Exploration and Development and Platform Petroleum, all of them owned by Nigerian investors. By 2008, these were a growing exception to the rule that African owned companies require technical partners from overseas to assist in the whole gamut from evaluating the subsurface to delivering crude at the export terminal.
Note carefully: It is crucial, in this era of the third scramble, to have a critical mass of privately owned African companies, owning and operating assets, managing portfolios and producing oil by themselves.
All of the four above-listed companies are run by personnel who were once Shell employees. And some of the most promising companies struggling to be in this league are run by members of this Alumni.
Conoil, the biggest African owned independent, is headed by Ebi Omatsola, a former Shell Chief Geologist and an industry icon who grew the company right from the scratch, taking off from a mere idea of the maverick Nigerian businessman, Mike Adenuga.
Niger Delta Exploration, the first company to be handed a marginal field and bring to first oil, has for all its 18 year history been superintended by Lai Fatona, an Imperial College trained Sedimentologist who left Shell in mid career 25 years ago to help found Geotrex, a subsurface evaluation consultancy.
Most of the Marginal Field companies which have reached production are run by Shell Alumni. Frontier Oil is headed by S. Dada Thomas, a former Shell Facilities engineer; Midwestern Oil and Gas is run by Adams Okoene; Platform Petroleum, in 2008, was managed by Austin Avuru, an ex NNPC employee who likes to draw attention to his “stint at Shell”. More notably however, now that Avuru has moved upstairs to run a bigger company, Platform has a CEO with a finance background, but the technical operations are overseen by a COO, Osa Owieadolor, who spent seven years in Petroleum Engineering with Shell. Pillar Oil’s only producing well was delivered largely by a cast of retired Shell personnel, superintended by Seye Fadahunsi, a technically honed earth scientist with a Master’s degree from Hull who benefitted early from being thrown into the deep end as a P.E, the eponymous Petroleum Engineer on Shell’s rigs in the late 80s. Fadahunsi spent seven years at Shell before crossing to Statoil.
Former Shell staff run the affairs in the emerging independents too. The Chief Operating Officer at FHN, partly owned by Afren, is Femi Bajomo, (who made his mark in the industry as far back as 1997 when he became the Managing Director of Shell Namibia).
Oando’s E&P subsidiary, OER, the one that is buying ConocoPhillip’s assets, was run by a succession of Shell alumni(three of them, the last being Tunde Ogunnaike), before a former Schlumberger staff, Pade Durotoye, took charge two years ago.
So what is it that happens, inside of the cramped, civil- service- look- alike offices on the Lagos Marina, on the spacious campus in Ogunu in Warri and in the airy estate of Rumuobiakani, in Port Harcourt, that makes Shell Nigeria a factory of oilfield entrepreneurs, for want of a better term?
How come that none of the big names that have retired from other Nigerian subsidiaries of the majors is running such companies?
Fatona had obviously not given that question a thought. Or rather, his take on it was in another direction.
“10 to 11 years ago”, he explains, on the patio of his rambling mansion in Magodo, in the north of Lagos, “a colleague and I tried to inventorise what Shell and (the oil service company) Schlumberger had contributed in the development of entrepreneurial skills. Our findings were that there were more companies that had been built by Schlumberger people than by Shell people”
But that is like comparing apples and oranges, he admits. Schlumberger has spawned a large stock of oilfield service companies in the engineering arena, no doubt. But the man to give you the contract for an engineering service is the man who operates an oilfield.
“Up until 20 years ago”, Fatona elaborates, over chicken sandwiches and coffee, “Shell was rigorously training its people. It was significant human capital development and it was recklessly done, with no holds barred.” It was not just about training, but subsequent work deployment. Fatona provides the example of a gentleman named Kunle Adesida, a prince of Akure, the sleepy capital of Ondo State. “He came in as a biostratigrapher, came into the lab and went on to become an accomplished sedimentologist. When he grew out of the job he was made to be in charge of crude handling, a crucial job”. Adesida left the company in the second quarter of 2008 as a business development manager handling Shell’s relationship with marginal field companies. “There’s something in the company that’s allowed him (Adesida) to bloom. It’s not just about training. There’s a measure of authority that comes with your responsibility”, Fatona contends. “In my first year in Shell my wells were being drilled. The cost of a well, even then, was in excess of several million dollars. It’s not just about coloured pencils. You had a field assigned to you, everything about that field is referenced to you. You defend your proposals, your wells are drilled, right in your nose”. Fatona finishes his coffee. “For all my colleagues that was the same thing; the guys that we started together; Precious Omuku, Evans Dimkpa, Sam Odumodu, Boma Jumbo-each one of us had the same experience”.
This is the kind of example that gets Bayo Akinpelu quite agitated. He has had the best of a career himself, both in Gulf Oil Company of Nigeria and in Chevron, which took over Gulf in the mid 80s. He was Exploration Manager at Chevron from where he retired, eight years ago, as Director of Public Affairs. He’s the founding president of the African region of the American Association of Petroleum Geologists(AAPG).
“In Gulf Oil, we were trained to be geologists”, Akinpelu argues. “But your environment compelled you to know a lot about everything. If you didn’t, you won’t get a lot done. The greatest training energy that Gulf Oil deployed was on its earth scientists. That’s where they put their eggs. They were kind of laid back in training of other professionals”. It was in this privileged situation that Akinpelu was reared. “Other professionals in the company relied on earth scientists. The drilling man came to ask you what to do. We earth scientists were relied on to co-ordinate the work of other professionals. We co-ordinated reservoir management studies. Earth scientists in Gulf were the centre of things.”
If the geoscientist was such a miracle worker in the then Gulf Oil, how come that old Gulf employees are not fanning out all over the place creating full E&P companies, or being asked to run them? How come Akinpelu himself has taken only a slice of the full cake? His life in retirement is devoted to running a reservoir audit firm.
The fighter in him would have him answer that question specifically later, but this is what he said first: “In Gulf, we were told to focus on the content. It could have been a flawed model”
That position: “focus on the content”, is closer to what Jide Agbabiaka thinks. Here’s another technically honed earth scientist who retired, close to a decade ago, as Executive Director at ExxonMobil Nigeria.
“Those two American companies: (ExxonMobil and Chevron)”, he says “are very functionally structured, in that if you are a reservoir engineer, you are a reservoir engineer for life. And that’s the way America itself works. Even now that there’s a movement towards integration, you’re still going to be the earth scientist in a team that includes other professionals”. Agbabiaka says that the career path ensures that “by the time a Chevron man retires, he prefers to be a consultant, whereas if you take a Shell man, the moment he leaves, he’s thinking about building an E&P company”.
Agbabiaka declares, rather dramatically: “The upbringing of a technical man in Shell is more rounded than in Chevron or ExxonMobil”. Then even more dramatically, he says, “The geologist in Shell is a better businessman than the geologist in Chevron or ExxonMobil”.
Neither Agbabiaka nor Akinpelu agree that there is a Corporate Training Deficiency in either Shell or Chevron. ”It’s more about orientation than capability”, says Agbabiaka. The moment a Shell man retires, he’s thinking of an E&P company”. He remembers that some Shell ex-personnel invited him to join an E&P company after he left ExxonMobil, but he opted for working for them on a consultancy basis. Mr Agbabiaka has since put together his own (not E&P but Project Management) company”.
Akinpelu’s theory for the preponderance of Shell faces at the top of indigenous E&P companies is the preponderance of Shell retirees in the market. “They’ve been having retirees long before any other company”. And Shell has a way of haemorrhaging staff (my word), quality personnel or otherwise, every three years or so. “I have information that they are in another round of voluntary retirement packages as we speak”. Asked whether it is not the company’s principle of empowering its Nigerian workforce that has enabled Shell Nigeria to have a succession of Nigerian Deputy MDs for 12 years before 2004, when it then started having a Nigerian as Managing Director, Akinpelu says it is “not a reflection of the quality of Nigerians on either side (Shell or other companies). It’s more a reflection of the thoughtfulness of a company on the sensitivity of their host. “I don’t think that this is being driven by morality”, he says. “Its plain old sensitivity. I want to believe that Shell is doing it because it is the right thing. I also want to believe they think it’s a business need to please their host”. Just as Fatona is skeptical about Shell training its staff as robustly today as it did 20 years ago, so is Akinpelu uncertain about the future of human development programme in Chevron. “I am not sure that Shell is doing what they used to do in our days, Fatona argues. “When Chevron came they threw all the human development principles out of the window in the last twenty five years, since 1988”. But Chevron always has good intentions: “Nobody puts on a more beautiful human development organizational chart than Chevron”, Akinpelu contends. “but will it be implemented to the letter?”
There’s some evidence that Shell still focuses on empowering Nigerians. Ademola Adeyemi-Bero, was Managing Director of BG the British Gas company at a time he was yet to be 45. Before he went to BG he was already Executive Director at Shell and was clearly in line to be the company’s Managing Director. Babs Omotowa became the CEO of NLNG at the age of 45. He was seconded from Shell. Much earlier, in 2008, that position had been Nigerianised. Chuma Ibeneche moved from the position of Managing Director of SNEPCO and became the first Nigerian head of the Nigerian Liquefied Natural Gas (NLNG) Limited. All three of Ibeneche’s predecessors since the company started production in 1999 were European managers imported from Shell subsidiaries elsewhere in the world.
This piece is an updated version of an article published in the July 2008 edition of the Africa Oil+Gas Report.
