I Spurned an Offer from Shell…Joined the National Oil Company - Africa’s premier report on the oil, gas and energy landscape.

I Spurned an Offer from Shell…Joined the National Oil Company

Diran Fawibe (Ph.D) regales our reporter, PAUL KELECHI, with anecdotal accounts around the founding of the NNPC, as well as creation stories of the Nigerian oil industry…

 The Nigerian petroleum economist, Diran Fawibe, runs an oil service engineering firm (International Energy Services Limited), out of Lagos, which is so widely acknowledged it consistently gets some of the top engineering jobs in the top bracket of oilfield development projects.

It was the reason I went to see him.

I wanted to find out who got what, and why, in the ongoing contracting process for the Bonga South Aparo development, the country’s largest, in-development, oilfield project.

But the discussion veered into Dr. Fawibe’s career trajectory.

He is known as a regular commentator on the industry’s challenges; a source for the country’s leading energy publications.

I knew he worked for (the state hydrocarbon company) NNPC during what is now described as the corporation’s golden era. But how did it happen?

He started, he tells me, from postgraduate work in the academia, after he finished his economics degree at the University of Ibadan (UI) and was in the process of doing his course work for a Ph.D in Petroleum Economics, when he got a job with the Central Bank, then headquartered in Lagos.

But while he was studying in UI, he had done an internship with Shell.

He remembers that the “Shell people had said I should come and work for them and I had said yes at the time”. But he was now at the Central Bank.

“Shell checked me out with Aboyade (the late renowned economics professor)  because he was the one who arranged my internship with Shell and he said he didn’t know where I was.

“Then one day a gentleman who was the fields and media relations person for Shell saw me during lunch break in Marina and told me that they had been looking for me. I told him that I was with the Central Bank and he asked me to

follow him. He took me to the Managing Director in Shell, a white guy and told him I was the fellow ‘who came here for his internship for Masters’. He said I promised to come and work for them and asked why I didn’t come back. I said I just decided to go to the Central Bank and he asked how much they were paying me and I said £1,740. He asked if I was ready to come and work for them and said they were going to give me £2,000 which was a substantial increase to what I was earning at the Central Bank but I said No Sir. The white man chipped in that they could pay me £2,400 but I still said no I didn’t want to work for them and he asked why. I said I had heard it said that if you worked in a private company, you must know how to run around people, you must know how to bootlick and also, there is no job security and most importantly, whatever your eyes see, your mouth must not talk about it.

And I told him that whatever my eyes saw, my mouth might talk about it and for that reason, I wanted to work in a government establishment where as a Nigerian, I would feel free to say whatever I felt about a situation. I should feel free to act in one way or the other. They were then laughing and said I was talking as an inexperienced young man and asked where I got all those stories from.

The man then told me that when I came for the internship, I was profiled and that was what they did for most people when they came to work in their company, they profiled the person to know his potential and know how far he could go on the job. That also helped them to develop a training programme that would help that person follow that career path. From my profile, he said, they could see that I had a high potential and they would help develop me and offered to increase that offer of £2,400 to £2,600 and said they wanted to give me something I couldn’t refuse. But, I said, thank you very much sir for your offer but no thanks; I want to stay in Central Bank and that was how I left.

I went back to my work but along the line, the opportunity of Nigerian National Oil Company (NNOC) came and I joined NNOC. We had high expectations when we were in NNOC.

AOGR: So, you were in the NNOC, that means you were one of the founding staff?

I was in NNOC in 1972 and I was one of the founding staff. Five years before NNPC (Nigerian National Petroleum Corporation) was created. They asked a few of us to resume at 7, Kofo Abayomi on Victoria Island, (where the Lagos office of the Nigerian Upstream Regulatory Commission is currently located), because they were making arrangements for our office in Marina, (at the time the main business hub of the country). But there was not enough space there for us because they recruited some other people. So, people like Funso (former NNPC Managing Director) Kupolokun and a couple of them were sent on training abroad but I was recruited at a higher level because I had a masters’ degree.

There were a couple of other people that were too. (Jim) Orife had come from Shell and there were some who were working in Gulf Oil.

We then moved to UBA building in Broad Street; UBA was opposite Kingsway (the biggest shopping complex in the country at the time). The aspect that I am going to is that, at that time, Kingsway was next to us and you could walk on Broad Street. Anytime we had lunch break, we would just take a stroll. Either we walk to Kingsway for lunch or we went to Leventis or John Holt. Then there was one restaurant that was very close to Bagatele.

They told us to be diligent in our work because the way they were seeing NNOC, it would become a major player in the Nigerian economy: because it would be at the heart of government business in the oil and gas industry. They said, for those of us who worked there, it would open doors for us in that, if we wanted land as an example, and we went to the ministry and they asked you where you worked and you mentioned NNOC, you could be sure that you would get it. We had high dreams and we expected NNOC to do very well but as it often happens, you can see where we are. I brought in the Condition of Service CoS from the Central Bank while some other people brought theirs from Shell and so on and we started preparing the CoS because what we got was a single line of appointment: ‘Your salary will be £1,740 a year’, because we hadn’t come into the naira at that time and it was a lot of money. When I was in the Central Bank, I was getting £1,400.

But things started going awry in 1973, during Udoji’s classification of companies. Udoji classified corporations and government companies and he put NEPA (Nigerian Electric Power Authority) as Category A corporation and he put NNOC as Category B and the salary of category B was lower than that of Category A and we were wondering why, because we couldn’t reconcile what they were doing in NEPA and what we were doing at the NNOC which was a high-profile corporation. Why were they doing this?

At a point, myself and Michael Olorunfemi wanted to emigrate to Canada when we were not so happy with what was going on but people were talking to us and saying we should be patient and that things would work out themselves.

Then disillusionment set in and at that time, I didn’t know what to do. Some people asked if I wanted to come to the ministry, but I said no, I didn’t want to be a civil servant per se. That was when I met Chief (Sunday) Awoniyi.

Chiefs Feyide and (Phillip) Asiodu actually were the ones who recruited me into NNOC. Chief Feyide was Chief Petroleum Officer, later designated Director of Petroleum Resources while Asiodu was the permanent secretary of the Ministry of Petroleum, but we used to call it Mines and Power. In 1975, when there was a change of government and Asiodu was removed as permanent secretary, Awoniyi became the permanent secretary. S.D. Awonyi was a fantastic person who knew how to manage people, how to encourage people. If Awoniyi asked you to carry out a task, he would praise you to the highest heavens. If you are good at what you do, he would encourage you and push you forward. I had a luck in that when (General) Murtala took over power as Head of State and they removed Asiodu, they wanted someone to brief them about the oil industry.

Shettima Ali Monguno, who was the commissioner I worked with when (the previous head of state) Gowon was in charge, recommended me. They sent a police man and a pilot vehicle to fetch me.

Murtala was sitting, Obasanjo was there, (he was the Chief of Army Staff) and they had Alison Ayida as the secretary to the government and then Awoniyi. Awoniyi was the permanent secretary, Internal Affairs but he was posted to defence to take over from Damshida. He had not taken over when the coup happened and they then said he was not going to go to defence but petroleum.

I met the four of them and they asked me several questions and at the end of the day, they said Awoniyi would be my boss and that I should be reporting to him.

Awoniyi took me to his office, found out about me and told me about himself. We hit it off right there and then. He was very good with people so much so that you can slave for him without knowing that you are actually slaving for him. So, the question of wanting to go anywhere else did not arise although a few months later, he gave me double promotion to compensate for all those times.

Initially, NNOC was supposed to engage in various commercial activities but that did not happen and when Obasanjo came on and succeeded Murtala, it was fair that they wanted to harness the resources in NNOC and the ministry because everything had to go through the ministry and the people in ministry were the ones who went to the government directly.

Anything that NNOC wished to do had to go through the ministry.

Awoniyi in his wisdom and in talking to Marinho, (who was then the Managing Director of NNOC), they felt it would be better to pull the resources of the two organizations to form the (Nigerian National Petroleum Corporation) NNPC and this would help remove the competition and help develop human capacity to help fulfil government aspirations for the petroleum industry. On that basis, they would be able to turn NNPC to a very virile organization and it was at that point that the government brought in Muhammadu Buhari as commissioner. He was then the military governor of the north-east. It was under him that the NNPC was created. Well, we were trying to develop it as fast as we could and there were lots of training for personnel so that they could take charge in various areas but as you may know, government will come up  with one thing today but tomorrow, another. When you don’t have a focused set of leadership and stakeholders, obviously, what is now happening in NNPC will be happening. It then became, “anything goes” and that is the story of NNPC.

AOGR: By now you had gotten your doctorate degree?

Dr. Fawibe: No, in fact, I didn’t get my doctorate until 1981 and I finished it at the end of 1983. I wanted to go to the University of Southern California (USC). But then we were doing a lot of studies in OPEC (to which I had been transferred) and I represented the steering committee of the study and so on. I got used to one of the professors (from the USC) who was also a consultant and he wanted me to do Ph.D with them. and as a matter of fact, I wanted to spend only three (3) years working before going for my Ph.D. but I got stuck but he said anytime I wanted to do that, I should come over and so I had that option. The second option was to go to Oxford University because I was a member of Oxford Policy Club.

Then I ran into a friend who was a year ahead of me at the University of Ibadan. We were chatting and I told him that I might be coming to UI to get my transcript because I wanted to apply for my Ph.D. at Oxford but he told me that I had already done a course work in UI. Why would I need to go and spend time in Oxford when the course work I did in UI qualified me for my Ph.D. and all I needed was to write my thesis and that was it.

I asked if that was so and he said he was going to check because at that time, he was Head of Department and he checked and called me the following week and told me that, except I have money and have time to waste, otherwise, this coursework that I had done qualified me for my Ph.D. and a simple case of me writing my thesis and getting my doctorate. That was how I jettisoned the idea of going abroad. I went there and I registered.

I then wrote the NNPC management saying I wanted to take a study leave and they said if I was going to take a study leave and they have to pay, I would have to do two weeks in and two weeks out if it is in Nigeria and they will sponsor me, pay for everything and I will still be collecting my salary and that was the deal I struck with them.

It was also good for me because I took the opportunity to go to OPEC and I spent 3 months in OPEC doing my thesis and my model. Since they already knew me, they assigned one guy to me to work with me.

Computer at that time was not as it is these days; it was big frames that you needed to feed punch cards into and so, they assigned one programmer to work with me and we worked day and night for 3 months. It was a crazy thing; we would start work at 9am and I would go back to the hotel at about 6pm to eat and sleep. At 9pm I would go back to the secretariat and we would work throughout the night. I would come back at about 6:30am or 7am, all in a bid to write my thesis. I could sleep for about an hour or 2, wash up and then go back. This was what I did for three months. I also went to Oxford and the United States to collect materials and so on.

What was your thesis on?

Dr. Fawibe: It was Nigeria’s crude oil in the world market, a case study of public policy. I was looking at a model for marketing Nigeria oil in the world market. You know, when you sell one particular crude oil, you are also selling other crude oil.

AOGR: As a blend?

Dr. Fawibe: Yes as a blend and the opportunity that I had was that I represented Nigeria in the economic commission board and also in the committee of experts where we did what we called relative values. We analyzed all crudes being traded by OPEC and also other crudes coming from Norway and the UK and US because if you are selling your own crude, you must know the relationship it has with other crudes in terms of chemical values. When you take the crude oil ASSAY which is the characteristics of the crude or its chemistry, you will look at your crude in relation to that from Saudi Arabia, Algeria and classify them as either light crude, heavy crude or medium grade crude and so on.

The price of your crude will reflect in its quality and this is not just the simple case of API gravity; which is a general indicative index. You say that the Nigerian crude in 34 degree API and Saudi Light is 34 degree API, but the Sulphur content of Nigerian crude is about 0.3 while that of Saudi crude is about 1.8. These are chemical properties and there are other properties that may make your crude to be better or worse than other crude for instance.

I was looking at that model and also looking at the transportation as well. When you take some markets as a case, Nigeria sells its crude to Rotterdam or to New York or to the Caribbean or the Gulf Coast and so on. But the middle east is closer to those areas. Now, Nigeria will want to sell its crude to Asian markets such as India, China and so, on which is a faraway place and the middle east is closer to those places. How do you now normalize the transportation cost, what are the differentials? Because we take Saudi crude as a marker crude, everybody will calculate your relative quality advantages over Saudi crude which is the marker and that is what OPEC countries do with respect to their individual crudes which are traded in the market and also relate it to other crudes which are non-OPEC crudes. This was what I was trying to evaluate and it was a very good thing. I finished my thesis in 20 months and I was done.

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