A 30 Year Stretch: The First, Tentative, Steps in My Entrepreneurship Journey - Africa’s premier report on the oil, gas and energy landscape.

A 30 Year Stretch: The First, Tentative, Steps in My Entrepreneurship Journey

By Austin Avuru

Making maps from 3-D seismic data on a computer workstation was a completely new experience. It was my first encounter with such technology at work. We turned out much more accurate maps of very complex subsurface structures. And it was easier doing this than the labourious manual system we had been used to!

When an NNPC team led by Mr. Jim Orife came for a high-level JV meeting in Chevron offices in San Ramon, California, United States, I was chosen to present to them the fascinating results of the work we were doing. I had never seen my bosses so proud of their staff. I remember Mr. Orife calling me aside afterwards and saying “Ï have always said this to all my staff, no matter where you are, your biggest godfather will always be your competence and dedication to duty.”

I have preached the same sermon to all my staff and mentees to this day.

When my scheduled three-month tenure drew to a close in October 1987, Chevron sent a special request to NNPC, asking that I be allowed to spend three extra months to enable me finish the work I was doing. The request was granted, and I stayed on till January 1988.

Outside of work, it was pure excitement. I drove six hours from Sam Ramon to L.A. and spent a weekend in Disneyland and a full day at Universal Studios. I spent two working days at the Chevron Research Center in La Habra California, staff of which included Nobel Prize recipients. Nights out in Oakland and San Jose were regular weekend events. I spent a weekend driving through the Wine region north of San Francisco, to the Redwood Park in the Northern most part of California with my Chevron Colleague, Greg Croft. I drove across from Sam Ramon to the fun city of Reno, Nevada and made frequent tourist trips all around the Bay Area. Perhaps next only to my four years in UNN, those six months in California completed the excitement that youthful and early adult life was for me.

I was confused, this was a start-up Nigerian Company that could fold up within a year. NNPC had been exciting but I was beginning to doubt if the reward system had room for so called “exceptional performers”.

When I returned to Lagos in January 1988, the GM Exploration at Chevron invited me to his office and revealed to me that his principals in San Ramon were very impressed with my performance. He offered me a job in Chevron and told me he was leaving the offer open for a twelve-month period. Whenever I made up my mind, I was to return to his office to conclude discussions with him.

At this point I was generally perceived as a high flyer with a very bright future in NNPC, even though I had never earned a promotion ahead of my peers. I was sent on more training attachments to Shell’s Seismic Processing centre in Port Harcourt in 1990 and subsequently to Western Atlas Seismic Processing centre in London in 1990/91. The high point of my career in NNPC was winning the GMD’s award in 1991 “for exceptional performance”.

In September of that year, seven of us geologists were selected to go to the University of Ibadan for a one-year postgraduate diploma in Petroleum Engineering. This was a programme meant to convert us from Geologists to Petroleum Engineers. Midway into the programme, I got an offer that was to change my professional trajectory and instill an entrepreneurial mindset in me.

Prof. Jubril Aminu, as Petroleum Minister, had awarded eleven oil blocks to prominent Nigerians in 1990/91 on discretionary basis, to promote indigenous participation in the sector. One of the recipients was Mr. Kase Lawal, a young, Houston based international businessman. His company, Paclantic Petroleum (a subsidiary of his Houston headquartered CAMAC Group) had been awarded OPL 204. He was setting up shop in Nigeria and looking for a couple of people to hire. Originally from Ibadan, he contacted his kinsman in NNPC (Dr. Olu Ayoola, who retired later as GED Upstream) to recommend two people he could hire. Dr. Ayoola gave him two names: Mr. George Osahon, who was a highprofile Deputy Manager and I (just becoming an Assistant Chief Geologist). He warned him, however, that he was unlikely to be able to hire us out of NNPC.

We interviewed with Mr. Lawal and he made us offers. My offer was a handsome naira salary plus a dollar component of $36,000 per annum! An official car was also thrown into the bargain and I was going to be the Exploration Co-ordinator of Paclantic (whatever that meant), while Mr. Osahon would be my boss as the General Manager. Now, I was confused, this was a start-up Nigerian Company that could fold up within a year. NNPC had been exciting but I was beginning to doubt if the reward system had room for so called “exceptional performers”. I was on the same rank with all my peers, including those that had been training under me.

I am usually not strong on risk taking and I do not gamble, so I took the offer letter to Mr. Ofurhie. Surprisingly and without hesitation, he said I should take the job. I reminded him that he had previously advised me that if I ever decided to leave NNPC, I should only go to one of the IOCs. He simply ordered me to accept the offer and assured me that if the company folded up, I would get another job as I was well regarded in the industry. I left his home and went straight to Mr. Lawal to accept the offer. On March 2nd, 1992 I assumed duty in Paclantic as Exploration Coordinator, while still running my Post Graduate Programme at the University of Ibadan.

I disengaged from Allied on July 01, 2002, after ten exciting years. This, whole narrative about my education and professional training is meant to situate the author in proper context for the benefit of readers especially as it relates to my bonafides as an entrepreneur

I settled fully into the job in July 1992, upon graduation from U.I. My first task was to interpret the available seismic data over OPL 204. The block was completely barren, lying at the edge of the cretaceous and beginning of the Niger Delta. There was no prospect within the acreage that could be proposed for drilling. Fortunately, Kase had applied for a deep offshore block as the terrain was opened up for exploration in 1991. A number of IOCs were hot on the race for the few blocks that were on offer. In June 1992, Kase’s company, Allied Energy Resources was awarded OPL 210. The next hurdle was to secure a technical/financial partner to fund the initial work programme for the block. While Kase was working the corridors of power to secure the block, Conoco had indicated interest in farming in if he was successful in getting the property. But after initial evaluation, they declined to farm in. Next candidate was the Statoil/BP Alliance, which had also been awarded two blocks, OPLs 217 and 218. After some tough negotiations, they agreed to farm in for a 40% working interest, but assuming 100% financial responsibility for working the asset. Allied Energy was paid enough money to offset the statutory signature bonus with a decent sum to spare. As part of their responsibility to help develop internal capacity within Allied, the partner was also expected to pay some “Upkeep” stipend to Allied. With this partnership agreement in place, Mr. George Osahon and I set out to build Allied Energy from scratch.

We hired four smart, young men, a geophysicist, a geologist and two petroleum engineers, equipping them with a full 3-D Seismic workstation, drilling and reservoir engineering software suites and arranged rotational attachments for them and myself to the Statoil study team in Stavanger, Norway. The Allied team participated fully in the design and planning of what turned out to be, the first deep offshore well in Nigeria, the OYO-1 well which was drilled successfully as a commercial discovery in 1995. During this period, the block had been covered with full 3D Seismic data. Through the evaluation of the seismic data, and the successful well and the planning for its appraisal and development, the compact technical team in Allied had honed its skills and grown in confidence. The plan was that in ten years from 1993, we would have grown in technical and management capacity to take over operatorship of OPL 210. The first test of this plan came in 1997. Cavendish Petroleum, awardee of OPL 453 (one of the earlier 11 discretionary awards) had, along with her Technical Partner Conoco drilled a well, Obe-1 and made a modest discovery. Not material enough for Conoco they decided to exit the block. Because we (CAMAC) had a minority (2.5%) stake in the block, we had access to all the data Conoco acquired, including the Obe-1 well data. After a detailed evaluation of the seismic and well data, we proposed to Kase that we could farm into the field as technical partner to Cavendish. So, in a mere five years, Allied had developed enough capacity to provide technical partnership support to another indigenous company. It was an interesting development, as Allied got into partnership with Cavendish using the exact same structure Statoil had with us. This time, Allied had 40% working interest and 80% commercial interest. Just as Statoil had paid us, Allied paid Cavendish a farmin fee and a monthly stipend to cover their office running costs.

We prepared the full Field Development Plan (FDP) for the Obe field, including the production profile and projected commercial rewards. We presented this as a commercial proposal to Tuskar Resources, a small Irish Oil Company listed in Dublin but also trading on the London Stock Exchange (LSE). The deal was for Tuskar to inherit our full commercial interest in the Obe field in what amounted to a reverse take-over of Tuskar by Allied. By the time the deal closed, Allied owned 67% of Tuskar Resourceswhich was trading at about 1.5 pence per share at the time with a market cap of about ten million pounds sterling. Deal done, Allied raised debt funding from some London banks and we proceeded to develop the field and put it on production in 1999. As planned, the field was doing about 4,000 bopd and utilizing a small FPSO with 45,000-barrel storage capacity. By the time the field came on production, Tuskar share price had risen to over 10 pence with a market cap of about seventy million pounds sterling. The story of how this great enterprise was eventually squandered has been told somewhere else.

By 2001, there was talk of government action towards awarding marginal fields to companies organised around experienced and/ or retired professionals. In my nine years at Allied, I had been at the forefront of the advocacy for indigenous participation in the Upstream Oil and Gas Sector in Nigeria. I had written and spoken extensively on the subject. I had also gained extensive experience, not just in starting up and organising an oil and gas company but in the commercial and entrepreneurial side of things. Nothing was going to stop me from participating in the imminent marginal fields licensing round. My days in Allied were numbered.

I disengaged from Allied on July 01, 2002, after ten exciting years. This, whole narrative about my education and professional training is meant to situate the author in proper context for the benefit of readers especially as it relates to my bonafides as an entrepreneur. My experience, over eighteen years, in setting up Platform Petroleum and Seplat Petroleum (now Seplat Energy), constitutes my personal account and views on the challenges of entrepreneurship in Nigeria.

Excerpted from ‘My Entrepreneurship Journey’, a Memoir by Austin Avuru, founding CEO, Seplat Energy. The book is due to be released in August 2022 by Radi8 Publishers

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