Bernard Oboarekpe, Council Chair of The Society of Petroleum Engineers In Nigeria, Speaks on the role of advocacy and stakeholder engagement in driving Africa’s Oil and Gas Policy
Africa Oil+Gas Report: The SPE Nigeria conference theme for 2014 (August 5-8, Lagos), appears to expand the continental searchlight that was beamed with last year’s theme. The society now talks of a Global Approach to Oil and Gas Value Maximisation, in what is called “Africa’s Energy Corridor”. Does this tell us anything about how successful you were with a similar continental subject last year?
Bernard Oboarekpe: The Oil Industry is a global one and the dynamics are global, regional and country specific. Experience has shown that the factors that could impact value from Oil & Gas resources are oil price, supply and demand dynamics, gas infrastructure and markets, regional connectivity and geo-politics. To derive maximum value, you must manage these issues effectively. SPE is a global organization with influence and impact across regional and national boundaries. Our thinking and approach is global, but our actions are local, aimed at maximizing value in the operating region. The discovery of hydrocarbon resources in many more African countries, and the rise of unconventional resources exploitation in the traditional markets for African crude oil, has brought about new threats, challenges and opportunities for the African region. This year’s conference seeks to discuss ways to manage these emerging issues within the widening Oil and Gas corridor in Africa, in an integrated and globally consistent manner. Yes indeed, our focus was on growth last year; but we also realized that growth may not necessarily equate to value. If we continue to do what we have always done in Africa i.e. shipping a sizeable proportion of our natural produce elsewhere in the world, we would miss the opportunity to maximize value from our resources. Real value comes through structural transformation, which can be achieved in Africa through regional integration, while remaining focused on the global energy system and dynamics.
In addition, through NAICE, being the African region’s premier event, we aim to expand our reach, audience and participation, as our contribution to uplifting the level of awareness, knowledge and understanding of the global energy world.
AOGR: Put in another way, are you following on this Pan African theme because you didn’t realize the objectives last year or, is it that you want to explore it further?
B.O: SPE’s mission is to collect, disseminate and exchange technical knowledge concerning the exploration, development and production of oil and gas resources, and related technologies for the public benefit; and to provide opportunities for professionals to enhance their technical and professional competence. SPE is organized along regional lines to be able to meet this objective. Our region is Africa; hence our focus and programmes must beam the searchlight on the region. In addition, every year, we also focus on addressing current issues. Last year’s conference was focused on growth and the conference dealt with the required elements that would enable growth within the Oil industry in Africa. Of course, while we grow, we must continue to ask the right questions and that is, are we adding value and deriving maximum benefits from our Oil & Gas resources in Africa? I am sure that our answer to that question would be mostly a resounding No! Nigeria, for instance, while growing production, has found herself looking for new markets for her oil, because the traditional markets in America and Europe have been shrinking, due to production growth in other regions. Such dynamics portend a danger for countries that depend solely on export of crude oil and to survive, such countries must begin to think of other ways to create and maximize value from their resources. This year’s conference will build on the success of last year and continue to explore ways to derive maximum value from oil and gas, first for the traditional producers in Africa and secondly for the emerging ones.
AOGR: Last year there were expectations that there would be panel sessions devoted to Intra African relationships but there were none; is there any plan to include some of that in the program this year?
B. O: Yes. This year we have a session that will be dedicated to discussing Africa’s economic transformation and the role that Oil and Gas would play in that process. Oil is big business and has the potential to lift any nation out of poverty if properly managed. For transformation to take place there must be structural changes to the current approach by traditional industry practitioners and nations. More hydrocarbons discoveries in Africa, means greater competition for export markets, as well as investment funding. If that competition is not managed in a healthy manner, the growth and value derivable from Oil & Gas in these countries could actually diminish. It is therefore necessary that intra African relationships improve, and some level of integrated approach adopted to achieve a win-win for the region through collaboration.
AOGR: Someone suggested, recently, ideas like a logistics cooperation along the West African coast; utilization of Nigerian expertise in countries like Ghana, Angola and vice versa and the success of cross border projects like the WAGP in West Africa and the South Africa to Mozambique pipeline in Southern Africa. Are such discussions likely to feature at this gathering for August 2014?
B.O: Indeed, co-operation in the area of logistics is one of the structural transformation elements that must be in place for the industry to increase value from Oil & Gas within the African region. Logistics connectivity is important in Africa, as that is one of the factors that have held down development in the continent. There are companies that are already well established in countries like Angola, Nigeria and South Africa. With good logistics co-operation and integration, such companies can actually service the emerging Oil & Gas nations in Africa effectively at reduced costs, without needing to invest in building new expensive infrastructure in those countries. We must expand the pipeline network, especially for gas, and put appropriate framework in place that makes it easier to access and do business across national boundaries. The entire Oil world is now almost completely connected by pipeline infrastructure and any new player must tap into this network to begin deriving value as quickly as possible. We also would like to build relationships across borders and logistics co-operation starts from a solid foundation of relationships, on which SPE strives to build upon. The synergy created on the platform of SPE has been the major factor that makes SPE stand out as the foremost platform in the industry. It is pertinent to mention that Nigerian service companies are currently providing services in Ghana, Mauritania, Angola, Uganda and South Sudan. Also countries like Ghana and Gabon have successfully adopted Nigeria’s local content policy templates to develop local competencies. There will be technical papers and sessions where some of these challenges will be addressed.
AOGR: Who are you inviting, apart from the usual ranking officials of the Nigerian government, to make the event live up to this billing of a Pan African platform?
B.O: We are inviting speakers to the panel sessions from the Oil & Gas Industry, as well as the larger entrepreneurial group in Nigeria. We will have in attendance as special guests, Alhaji Aliko Dangote, chairman of Dangote Group of Companies and a pan-African businessman; Mrs Folorunso Alakija, a businesswoman and philanthropist, who we expect would avail our audience with their wealth of experience in the business and value creation space . We will also have Dr Juliette Twamasi-Anokye of the Ghana Petroleum Commission as panelist in one of the panel sessions; the CEO/Executive Director of SPE International, Mr. Mark Rubin and other notable dignitaries. We also expect delegates from countries such as Uganda, Congo, Ghana and South Africa at the conference.
AOGR: Let’s leave the conference for a while; SPE Nigeria has, in the last five months, shown that its yearly agenda is not only about the July/August NAICE, You have had a Catch them Young Programme for “pupil” engineers; you have run the Oloibiri lecture and every month, there is a technical talk in every section of the council. In what areas do you think you could have done more than you have, so far?
B.O: At the beginning of this council year, we came up with a four point strategic agenda to help sections and chapters in Nigeria focus on key value areas. We coined the strategy as ‘COME’; which stands for Collaboration with others; Operationalizing our refreshed strategy; Membership development and growth; and Education for all on SPE/Industry activities and issues. In my view we have made significant achievements in each area. That said, we’ll still need to do more in the areas of collaboration and public education. The public’s understanding of our industry is still limited and that is a source of worry for industry practitioners and governments alike. The various organizations and societies within the Oil & Gas sector must come together and marshal out strategies to do this. Unless public concerns and perception of the sector are addressed adequately, the growth and value maximization we expect may take much longer to achieve.
One example of such effort is the collaboration between SPE and the Lagos state government to deploy one of SPE’s programs, Energy4me to 50 schools and reaching about 1000 students in Lagos state this year. This is a curriculum that educates students on the oil and gas industry early enough in their training. This sort of collaboration can help minimize ignorance about the oil and gas industry, help people understand the true picture and how it affects their lives and the economy, and may also help to reduce militancy arising from misunderstanding of the industry.
AOGR: The Oloibiri Lecture communiqué calls for vast improvement in the teaching of engineering in Nigeria. Last year, the society organized a Petroleum Engineering Education Summit with SPE Nigeria’s full support. Yet, the matter is still in the realm of emergency. Do you think that SPE itself could do much more in helping to achieve this by facilitating delivery of equipment and training to engineering faculties?
B.O: Building on the success of the Education Summit of last year, SPE through the Committee of Heads of Departments of Petroleum Engineering, in our Universities (CHPED); have taken steps this year to engage various organs of Government on the outcome of that summit. CHPED held engagements with COREN and NUC with positive outcomes in March this year and further engagements are planned with the ministry of education, PTDF and other bodies, who are stakeholders in tertiary education in Nigeria. SPE will continue to support CHPED in this direction to achieve a step change in the management and funding of Industry related programs in our institutions. SPE cannot do it alone; hence co-operation of all relevant organs of government will be required.The Board of Trustees of SPE, Nigeria, is also working on an industry research funding program that is aimed at building capacity in our universities, as well as grow indigenous companies’ capacity in Nigeria. All these programs are geared toward ensuring that our engineering faculties are focused on the right things and have the required means to carry out their programmes.At the global level, SPE is collaborating with stakeholders in Nigeria and SPEI to revamp and standardized Petroleum engineering curriculum across schools in Nigeria, to meet the required global standard.
AOGR: Do you think it is in the purview of the SPE to facilitate the visit of students to engineering projects, e.g., gas processing plants, Thermal (gas fired) electricity generating plants, and oilfield projects. There is a sense that much of these projects are going on without the benefit of students’ visits.
B.O: SPE kicked off a very robust field visit program for students to Oil & Gas facilities last year. I have always marveled at how a student would obtain a degree in Petroleum engineering from our institutions without having visited some facilities in the Oil & Gas sector. I am however happy to announce that over 200 students from over 12 institutions have visited oil and gas facilities in Shell, NAOC and Total since the program started. It is an ongoing programme where we would like to see more progress in the years ahead.
AOGR: You have just three months to go Mr Oboarekpe. What do you think you are likely to have missed out, from your plan, by the time you hand over the chairmanship?
B.O: SPE is a going concern and our programmes span over a number of years. This council has completed some projects started in the last council year, and some we have started will be completed by the next council. In that respect, I wouldn’t say that we have missed out anything from our plan. The next council will of course address the emerging topical issues of the day, in addition to fulfilling the core SPE mission.
AOGR: And what would you have considered the singular, most important achievement of your tenure.
B.O: There are many areas we have made significant strides this year, but I would like to mention two. During this council year, we have significantly fostered collaboration with other societies in the industry, first through the Oloibiri Lecture Series and Energy Forum, which we held successfully for the first time in the nation’s capital Abuja and secondly, we made joint representation to government on issues that are important to the industry. This was achieved in fulfillment of our strategy to focus Oloibiri Lecture Series and Energy forum on Policy development, while NAICE remains our main technical event. The lecture this year also focused on the centenary of Nigeria existence as a Nation and I am glad that we came together as an industry to commemorate the event; whilst also x-raying our industry and seeking direction for the next century.SPE, Nigeria, also became a corporate entity this year, as it was formally registered and recognized by the Corporate Affairs Commission.