The Nigerian geoscientist Biodun Adesanya founded Degeconek as a subsurface hydrocarbon evaluation consultancy and has grown it into delivering well services and surface facility work in the 33 years of its existence.
Degeconek was front and centre as the evaluator of the 50+ marginal oil fields offered in the contentious Nigerian 20202021 bidding round.
A former president and fellow of the influential grouping of industry technical professionals: the Nigerian Association of Petroleum Explorationists (NAPE), Adesanya recently fielded questions by a team of reporters from Africa Oil+Gas Report (AOGR) on this issue, his company’s growth path, as well as the trends in the industry, at his residence in Victoria Island, Lagos. Transcription of excerpts from the first tranche of the interview was by LUKMAN ABOLADE, AOGR’s Senior Correspondent.
Degeconek has been helping Nigerian production companies with subsurface evaluation for 30+ years. That’s quite some longevity in this business environment..
We haven’t updated our website. Degeconek is going to be 33 years on September 19, 2023. It has been a very bumpy ride. It takes a lot of inner strength and some sort of conviction that it can work. When you have that conviction and you’re strong inside of you, then you will figure out a way to continue to manage it.
What is Degeconek’s value proposition?
When we started, there was no equivalent of this sort of service. The Nigerian upstream exploration was going domestic, was going indigenous. That provided a window of opportunity. The new E&P companies that were being awarded assets; Conoil, and the likes of Express Petroleum, didn’t have the kind of structure the IOCs had.
There were shortages of experienced manpower, shortages of equipment and facilities. Someone needed to fill that space. So that was what we saw as an opportunity that we wanted to quickly jump into.
I was still in paid employment. I wasn’t doing this 100%; more like a trial kind of situation. At the appropriate time though, I moved on. I started off from where I had knowledge. I have had experience on seismic data acquisition; I’ve risen to the top of that. I moved to an operating company Elf Petroleum then, now TOTALEnergies, where I came in as a middle level senior staff, and rose to a level of asset team lead. Then I felt, okay, since this opportunity wasn’t going away, I needed to latch on to it. I began to transit gradually; that transition took me through Halliburton, Landmark Graphics. That experience reinforced my conviction that this could be done. I went with full disclosure to Landmark. I told them this is where I was going and they said ‘okay, fine. It’s complementary and we need you to here’. So it was a win-win for everybody. Then I finally moved on, and now that you’re out in the sea, there’s no backup anymore.
We started off with practically zero. I remember that my first job was me being the resource person. Somebody wanted to acquire 3D seismic data and they needed supervision. Here I am. I went to do the supervision in the field and then came back. I made some money and then invested that money to buy some equipment. Gradually, we started building up. I don’t have a straightforward answer to your question but that’s kind of the way and manner we kicked off. It was mainly to fill a void that was emerging at that time.
What have been your high and low points?
The high point has been the fact that we give professional advice to our core customers on what they should do, based on what they have, by way of the assets evaluation. We’ve had scenarios where almost everything we’ve told them, if tested, had been found to be correct. So that gives me some momentum that yes, we are adding value. We had a client in our early days that had already prepared a location to drill. They had just acquired 3D seismic data but they had prepared a drilling location based on a 2D interpretation they had made prior to the 3D acquisition.
Asset Evaluation & Field Development Plan
“Companies had no more than two hours for data prying: to assess and interpret assets they hoped to invest millions of dollars in?
DPR gives us a 3D seismic dataset of this size (small size by show of hand). If on our own database we have a 3D data that is of a larger size, we’ll use that. When we finish the evaluation with the regional benefits of our own data that will enrich our narrative about the field, we can then shrink it to the official size that we were given…”
They didn’t have any facilities to interpret the new 3D data they had. We came in at the right time and took that tape on; we had just acquired interpretation facilities ourselves and we used those facilities to interpret the data. We were able to tell them that look, if you drill here in the way and manner you want to do the work, the target reservoirs will be water bearing. So you can imagine doing an excellent road; if I remember correctly, the road was like a tarmac, tarred, paved, and almost ready to go. And, you know, this was the Nigerian Petroleum Development Company (NPDC). It was Mr. Smart Fadayomi that was the exploration manager. He went to meet his then Managing Director, Mr. Mac Ofhurie, telling him “this was what these guys are saying.” Mac himself decided to come to our presentation: ‘I need to see what these people are talking about”. So, when we went to Benin, and we made our presentation to them, he was like, well, we can take the risk and gamble with these people. But Smart, it’s on you’. They relocated that position. In fact, they took a sabbatical in drilling that well. And after all, said and done, the well did not sit in that location, and they relocated the flow station to that new position. The flow station new location was actually an ideal and a better location for drilling. So that was our first interpretation job. That was in 1997 and when we did that, they became our selling point to launch ourselves. We did something with Agip. And then we started growing from there, and to the glory of God today, we’ve not told anybody categorically to drill here and they will drill down to find water, or where we say don’t drill and they go ahead and drilled and find what we said they wouldn’t.
That for me was the highest point. Now to the low point; as a matter of fact, I just mentioned that our first interpretation job was with NPDC, right? Yes, NPDC had evolved from that time to a point where, as a company, we took the informed decision not to go looking for work from them. There’s a particular reason behind that. And what we saw had to do with value system, and processes and all of that; we got to a point where, it became quite impossible to continue. And we just stepped back. It became very difficult for us to work for government. So we generally don’t work for government. And the last time we worked for government, it was the last Marginal Field bid round. I was sitting in my house and I was called and asked if we could do ABC, that we were the only ones that could do it. Because we had the data, we know these fields; let me let me pause there. But that was our lowest point. Just to give you a direct answer.
With oil prices on the high side, a lot of service providers are talking to operators; we hear whispers of infill wells here and interventions there. What is the status for Degeconek? Are you getting a lot of field studies coming your way?
The services we offer are broadening, as we speak. We are already looking at offering integrated services. We were approached by a very strong customer who told us: “you guys need to do this for us.” We have a project with about three wells that we’ve been asked to deliver end to end. Now, of course, you know, we don’t have titles to do end to end; we have to now select all the partners with us to provide what they call integrated services. We are in the middle of that selection process and we are discussing with those partners here and there just to have some landing on the mode of how we will work. These companies relied on us for the subsurface work which we have done. And they say since you are the architect that designed it, you might as well come and build it. That’s where we’re heading. In the next few months, you will hear by the grace of God, one success story of those kinds of services. We are putting together and lining up the sequence of activities to be able to get to that. So that’s where we’re heading.
Is it one of the Marginal Fields?
No, no, it’s actually a full acreage. We can offer everything end to end as a service. And then there’s also the part two, which is, we can go raise funds and deliver the wells then work out a commercial arrangement. Maybe not to the extent of partnership in the asset itself, but some sort of workable comm ercia l arrangement. That is a win-win for everybody because, personally, I don’t like to get into people’s businesses, especially if it’s a family related type of business. I’m not interested. Let me just do my thing and get out of the way. I can do my thing, you can pay me in crude, you can pay me in cash, you can pay me over an extended period of time; but there must be an exit point. That’s the kind of structure.
Which companies are on the top of Degeconek’s order book?
We have different categories of clients; we have different sets of services. A lot of people think we’re still in the asset evaluation, subsurface type of work alone, but we’re actually doing a lot of job on the well side. We’re doing a lot of job on the surface side as well. Basically, in the category of lOCs, Mobil and TOTAL are our clients. We work for Shell and Chevron. We’ve done one or two things in the Cavestone Logging services side. On the subsurface side, indigenous players still remain our major clients because that was where we started. Companies like Pan Ocean, Newcross, Dubri; these are companies that own whole blocks and we have run several sets of services for them and we have this army of marginal field companies too, both existing ones and the ones that are emerging now that we deal with. We have ventured also out of the country.
Onsite Support, Workstation Rental & Training
“The Motivation for Marginal Field Round Was to Make Money for Nigerian Government
There was recession; Nigeria was struggling to balance its budget. There’s need for money. So the motivation, in my opinion, for that licensing round was to raise money. So the director was going to commit to the President that he will make approximately this amount of money from this process. And I mean, that was the first time I saw Buhari’s signature that the Minister for Finance should create a code for DPR for this accounting quarter budget report, or whatever they call it.”
Petroci, the National Oil Company of Cote d’Ivoire, is a major client of ours. We just finished a project from October 2022 which ended in March 2023. And we’ve done one a year earlier as well. We’ve been to Angola, Kenya, Benin Republic, and Ghana; we have a foot at the door in Senegal also.
Petroci had a block called CI-11. It’s the one that they are operating, it’s offshore; they needed slick line services and part of the services was to check for the well integrity. These are old wells, relinquished by the likes of CNR, or some of these old companies that have been managing the production. But over the years, they’ve dropped a lot of things inside the well. So, they needed to do fishing, they needed to restore production and they needed to clear the wellbore. So we mobilized a full slickline unit to Abidjan. We did it in partnership with another company. We came to Nigeria to look for a partner; we then went there to do that job. And in the course of doing that we offered our own internal services as well to complement that effort. So, their production was restored by about 800 barrels per day and it’s a lot for them; they are quite happy with the outcome. So that just ended and there is supposed to be a follow up to that which we’re waiting for basically; not the same thing but this time around, it’s a hydraulic workover type of work which we are already discussing.
50 SPVs out of the marginal field round? It will seem like you hit a jackpot!
It’s obviously supposed to be that way. But we have competitors and the field is getting crowded now. We’re not the only ones that will benefit from the opportunity. There are other companies. And you know Nigerian companies; I’m proud of where we are now. People are stepping up and the bar is being raised every time and I think we are doing a good job, but at the same time, as typical with anything, there might be other people that are not up to the level that is required. This marginal field acquisition is like the parable of the sower. Some will germinate, some will retain, some will do this, and some will do that. Some people will emerge. If you remember the 2003 licensing round, it’s the same situation; some have gone off the radar, we’re expecting something similar to happen.
Can you point to some Marginal Fields that you think can deliver first oil by end of 2023?
We are actively working with two that are looking at delivering first oil by September 2023. One has already finished the workover, capped their well with a Christmas tree, and is working on how to produce it; then with the other one, the rig moved to location to do a reentry and a sidetrack is going on. Right now they’re almost about 85% complete. And I’m sure with the kind of plan they have, they should be able to get to first oil. They are ready for what they will do at the surface; it’s more like, just show me the flow lines and I will know where to pump to. So they are ready to go. There might be others, but it’s quite a tough takeoff for a number of them for so many reasons. One of the key reasons is the fact of raising the finance. But the one major drawback many companies have is telling their story in a cogent, compelling way: about what they have and being able to present that in a format that the investment community understands.
Putting that story together has been some of their issues. Of course, there’s a reputational problem with Nigeria. Who is this person talking to me? And there is a lot of overlapping due diligences that are conducted just for acceptance to be made to whatever you’re bringing forward to the investment community. So, there’s been all manner of reasons. But primarily, money is key; finding that money has been a challenge for a number of them. A lot of them were burnt out while trying to raise the signature bonus, they’ve maxed up everything that they don’t know where to go again or how to move forward, you know, from that point.
For somebody who has a Christmas tree right now, completed with two dual strings; he’s racing against time; he needs to make money. He has found a barge as of today; it’s just a matter of linking everything together and we’re going to this place. This is my offtaker in the short term. I’m going there sign, so getting the paper signing the agreements, that’s where they are.
So how much of the ongoing deep water bid round are you taking advantage of?
I am a very conservative human being; I don’t want to spread in every area. I like the shallow water, the swampy areas and the land areas; what I call the traditional areas because that’s where a lot of fields and opportunities are. Now the sorts of players in the deep water are usually big players. And for every big player, they do have their own internal structures, or if they don’t, they have consultants that they deal with everywhere they go; it doesn’t mean that we have not been asked though. We’ve been asked for things but it’s at a very peripheral stage. And it doesn’t mean that we don’t have knowledge of what goes on in deep water, we know the geology; it’s just that we can count very small times when we had to do things related to the deep water. But our bread and butter are the traditional areas. We had a client that bided, you know, and we deliberately didn’t want to be on the driver’s seat in terms of who is their consultant. But we managed to supply one or two information that are critical to their decision-making process in that process. I generally think that the deep water is for the big boys and I don’t want to waste my time talking too seriously. Of course, when the time comes, and will get there, then we will rise up to that occasion.
You talked about Degeconek offering integrated services, what specific services do you mean?
When you do subsurface work, you map and you come up with an area that you feel is a candidate that deserves a well to be drilled there. And then somebody says ‘go and drill that well’. And then when you drill the well, you find what you say is there, then go ahead and complete it and just deliver me the hydrocarbon at surface conditions. So that’s what it is. So it requires drilling, and all the attendant services that goes with it; it requires facilities completion, testing, and if need be, whatever services you need to do, as long as you deliver the hydrocarbon to surface for commercialization.
I hear that if you don’t have an NPDC plan, you are not in business, and you used to have an NPDC partner, you started out with NDPC, how is that relationship now?
Right now we don’t have an NPDC plan. We didn’t have any plan for anybody, per se. The way we do is we just flow with what comes. We were the first contractor to offer workstation interpretation services to NPDC. That was Oredo Field in OML 111. That was during the time of Abacha. After that episode, in 1998, during the regime of Abdulsalam Abubakar, there was an attempt to sell those assets. So, they asked us to provide data room services for all; it was held at Sheraton in Ikeja, Lagos State and we provided that service. So they then brought us into knowledge of OMLs
- 65, 66 and 119; those Okpoho/ Okono areas; then in a subsequent reshuffle, and like you know, the NNPC changes management quite often so we were asked to evaluate OML
- Abura, Owopele and then we were asked to assess OML 64, where we had the Kampo and other assets. So we were in good chummy with NPDC. But when the good people left and the other guys come in and the culture began to change, I had to take a deliberate step back from there. I do from time to time run into some of the then young officers that are now big guys. And they always accuse me of being the one that disappeared and not come back. But NPDC for me, I’m not convinced that the way and direction they have cut out for themselves is the best way. Sometimes I have this sense that they are hyping what they are doing; there seems to be a lot of what they call optical view as opposed to actual work. So the optics is always being hyped to look somehow. And they try to get a lot of publicity, and so on. So but the real thing is still, I mean, they are partners in some of the Shell divested areas, for example, if you speak one-on-one with those other partners, they’ll tell you they (NPDC) are slowing them down and that kind of situation doesn’t augur well for development if you look at it. And there have been a lot of challenges that those companies are facing as a consequence of this kind of arrangement. Seplat who escaped through the gate before they shut the gate is also being pulled back by that relationship. So something has to be done, in my opinion it shouldn’t continue perpetually.
Planning and executing a successful 2D-3D seismic campaign for clients is one of our key competences
“How We Started Writing Competent Person’s Reports…
We wrote our earliest competent persons reports, when the first set of marginal fields were awarded and Oando was to partner with some companies who had won the 2003 bid; including Energia and Network Exploration and Production Nigeria Limited. And then in 2006, we began to work for financial institutions, providing advisory services to banks right after Charles Soludo consolidated Nigerian banks together. There was now capacity to fund, but they didn’t have the requisite people to manage that process.”
What new trend are you seeing in the sector now?
The same dimension that we are heading; I have seen one or two companies that are heading in that direction as well or have even gone ahead to execute a couple of projects in that direction. It has been very difficult for Nigerian service providers to consolidate ourselves to come together and form one Halliburton or one big Schlumberger; you remember that the likes of Schlumberger had Anadril and others; these are all individual companies that fused together and came up with that name Schlumberger Services. We should be thinking in that sense as well. But Nigerians are usually very difficult to work together with. And we have to overcome that challenge, which has to do with attitude inside of individuals. It’s not something that is cultural and I think if we can overcome those challenges of working together like the foreigners have, especially those from the Western world, they have a way of doing this. They respect sanctity of contracts and agreements. Taiwo can have an agreement with Kehinde and they will work together as if it’s not the same mother that gave birth to them and everything will still be fine. We need to get into that sort of culture whereby we are able to work together. If we come up with a mega sized service company, we can go very far; not only within Nigeria but across Sub Saharan Africa. We can do a lot and this is coming up gradually as we speak.
TOTAL just reported a new find in the South East Offshore Niger Delta; and Seplat reported a new discovery as well, in OML 40, in the northwest of the same basin. Does this portend that there is an active exploration going on in the country?
Active, but not as active; however, there’s exploration work going on. For those who want to do it, if you look at the last 15 years of the industry, I mean, we’ve probably gone through recession twice, low oil price regimes, probably three times or something like that. And everybody had learnt some lessons amongst the established ones. The people that haven’t learned many lessons are the newcomers that are coming in now. We have always advocated even at NAPE level that we need reserve replacement; otherwise if it continues to deplete, we will run out. So, I’m not surprised that TOTAL made a new discovery within what you might call a busy a r e a , b e c a u s e t h e O fo n a r e a h a s developments all around it. OML 40 too is a busy area of some sort. Okpokoro, Sapele, there are quite a number of discoveries there. Ovhuor is there as well. So there’s been discoveries; making a new one in the midst of busy areas is like incremental discoveries. That will be a different thing from oh, if you tell me now that offshore Lagos, there’s been a discovery, you know, the context of the exploration narratives is different. So you are in a much developed environment, brown brownfields all around you. And then you now make a greenfield, it’s not totally unexpected. Every company who has assets similar to these should be encouraged to go back and do the sort of the things that TOTAL and Seplat did; because the beauty of that is, time to connection of that discovery to the market is very short. There are facilities that you can hook up and produce. So that’s basically what I think is going on in that respect. And I think that there are still a lot of reserves that people are not venturing out to, but knowledge and professionalism and risk taking is different from entity to entity. If Mobil looks well, they will see similar opportunities, if Shell looks well, they will see some, if Chevron or Seplat looks even in their other blocks, they will see similar opportunities.
I want to talk about the business of Competent Person’s Reports (CRPS). Who writes it? How is the qualification determined, has Degeconek ever been consulted by any producing or to be producing company to produce one?
The terminology “competent person” is something that we inherited from the industry, basically, globally. It means somebody who knows; somebody who has knowledge. It is the understanding of the professional knowledge of how to look at an asset and go inside the asset and come up with a report that somebody can read and take a decision on.
It requires experience, it requires expertise, it requires being conversant with the narratives. It also requires you wearing two caps; you wear the cap of the owner of the asset, you also wear the cap of the investing community. For those who want to look inward, you even have to wear a third cap of those who want to finance that kind of asset. So you have to put their perspectives all into context when you’re doing that kind of report.
Now, what does it entail? Basically without bias, it entails going into the asset as best as the data you have speaks to you. And you’ll say this is my opinion about what this asset holds; you then subject that opinion from the technical perspective into the economic realm, which requires a fiscal regime. Now where the fiscal regime has changed, or is changing, or is not defined, then it becomes a challenge of some sort for you to make certain assertion with clarity. And then the report permits us also to put a very giant disclaimer in the front page and say well: this is the best I can do given the circumstances and the data that I have. So it’s an opinion, first and foremost; it’s an opinion based on your thorough assessment of the asset and the economic environment in which that asset will be developed or operated upon and you are able to come up with a report.
The Competent Persons Report has a lot of requirements. Sometimes, there is what you call ideal set of requirements. And then there’s the best that you can get type of information that you can get. So it requires information, data, and reports for you to take off; you’d have to read every report and understand how they got to that point before you do what you need to do. So we’ve done several competent persons report before now. I remember one of our earliest competent persons report, it was when the marginal fields were awarded and Oando was to partner with some companies who had won some marginal fields in 2003; including Energia and Network Exploration and Production Nigeria Limited. And then in 2006, we began to work for financial institutions, providing advisory services to banks right after Charles Soludo consolidated Nigerian banks together. There was now capacity to fund, but they didn’t have the requisite people to manage that process. So we began to fill that void. We started offering financial advisory services basically from the technical perspective, and things like NPV and so on were some economic indicators started coming into what we do. So we had practically almost all the Nigerian banks, right after Dr. Fatona got a facility for Ogbele field from Intercontinental Bank. So Austin Avuru, George Osahon, provided a first level technical work for Intercontinental Bank; we were called in subsequently to tidy that up. So then we had a company from Switzerland, John Pruner brought them to us. So that was our introduction to what you might call competent, confident persons report. Its quality is a function of the information that is available to you and whatever you’re able to gather yourself. So we had to do those kinds of work. But as far as the technical aspects are concerned, once the data is clear, once everything is there, we do what we need to do.
That takes us to the elephant in the room, in June 2020, the government of Nigeria apparently one or two months into COVID decided that there was going to do a bidding round. A lot of people are skeptical. Sanni Hassan, then deputy director for Basin Analysis at the now defunct regulatory agency: department of petroleum resources (DPR), broke the news to Africa Oil+Gas Report. The Government had announced bid rounds several times in the past which did not happen. How did Degeconek get involved this time around?
Sanni Hassan called me on a Sunday night at about 8pm. It was in April 2020. And he said ‘Biodun, I’m here in Abuja and everybody’s here’. I understood the meaning of the “everyone’s here” to mean that either the Minister of State, or the director of DPR, or both, were with him at the time of the call. There were restricted movements all over the country. Sanni asked me: “Do you do competent persons report? Do you have data on these following fields? They were the revoked marginal fields of 2003. And I said all of them were like my clients, we have data about them. He said ‘good, that is what we want to know. There were 11 of them, the ones that were not in production. And the ones they erroneously thought were not in production but had actually commenced, to some extended well test capabilities. So, we fast tracked; the selling point to do that job was that nobody had concentrated data sets like that. And if we begin to do let’s say tendering, it would take us a lot of time. We don’t have the luxury of time. ‘Are you sure you have these data’? There was COVID, there was restriction and nobody was allowed to move. So he gave me instruction that I should go to the DPR office and meet one of the deputy directors, he was an assistant director then and he became later became a deputy director. I was asked to go see him that he will be briefed. So I said, well, there’s restriction how do I move? Before I could say Jack Robinson, they sent me a letter from the government of Nigeria and said I can move with it; I should show it to any police officer or anybody that demands it of me. So I said I needed it for 13 of my staff. By the time I met Bashir Ndabawa in Lagos, I asked for permission for 13 of my staff to move from their homes. So I showed the letter they gave me; a letter listing all their names. And I sent it to all the 13 of my staff and they were able to meet me in the office. So with this task, incidentally, there were some of the fields that we were doing competent persons reports already on, but we were not commercially being sorted out by the companies. So it was just a question of, okay, it’s a no brainer; we can clean up this report, address it to these people and that kind of thing. We’ve done detailed technical work ahead of that time, some of them said well, Biodun, when we get to production, we’ll pay you. So it was easy for us to meet that request from DPR at that time, and when we finished and gave them the preliminary report, they said, wow, this is even better than what we expected. So Hassan said this is a good quality job. You know, all of them, including the director, and they said that they had some of the ones that had been done for them. ‘He said ‘select those ones that they had terrible narratives about and let Degeconek also look at them for us.’ That was how we had additional fields assigned to us. Of course, the revocation came for those marginal fields in April 6; that was the date on the letter signed by the President revoking those 11 blocks. Or is it 9? Well they added Abigborodo and Helly Creek fields (which were works in progress) to make it 11. When they revoked those blocks, I was getting closer to conversations with DPR at that time and at a point in time I was in the director’s office. I saw the memo that he wrote to the President as the Minister for Petroleum Resources basically saying that this was what they projected. I mean, we need to situate that period of time into proper context. There was recession; Nigeria was struggling to balance its budget. There’s need for money. So the motivation, in my opinion, for that licensing round was to raise money. So the director was going to commit to the President that he will make approximately this amount of money from this process. And I mean, that was the first time I saw Buhari’s signature that the Minister for Finance should create a code for DPR for this accounting quarter budget report, or whatever they call it. You know, I saw that. And when all of that happened, we then were given this, oh, you need to hurry up. We’ve gotten presidential approval; I saw “Go ahead” justification. You know the way they write these government memo prayer these days, approved, go ahead, quickly. So they’d already committed to demonstrate 54 fields they’d already sent out. They’ve already said that they will kick off in June. They’ve already sent that to the President to which they got a go ahead. So when there was a class action suit, against the revocation, they were short by nine or 11 fields. So they then had to start scrambling for where to find the missing fields. There was another generation of new fields that were never in the basket. I mean, they were never thought of being on the list. A number of Chevron fields were involved at that time. And they brought them up, just to make the numbers. You know, we have a field called Atamba and Mfoniso. There was a lot of debate as to whether Atamba and Nfoniso should be one field.
“‘Nigerian Upstream Providers need to merge together to form one Super Service Company’
It has been very difficult for Nigerian service providers to consolidate ourselves to come together and form one Halliburton or one big Schlumberger; you remember that the likes of Schlumberger had Anadril and others; these are all individual companies that fused together and came up with that name Schlumberger Services. We should be thinking in that sense as well. But Nigerians are usually very difficult to work together with.”
Igbomotoru North and Igbomotoru is one field; they divided it into two just to make the number. So by the time they did it, they ended up with 55. So those were the discussions going on; Fast and Furious type discussions. And then we’re back; so you can say that we evaluated on three tranches. We evaluated the marginal fields of 2003 until they revoked those ones and there was a class action we put that aside. There was the one that Bulwark did not do well, in their opinion, they selected some and we evaluated them; this nine or 11 that needed to make up the number, we evaluated them also so in all, we evaluated about 45 fields. Now, imagine this situation of no movement; COVID, limited time and data limitations. You know DPR efficiency in terms of data collection, data archiving, data retrieval is very weak. So you have fields that have wells that are deviated but, no deviation data; that evaluation dies right at that point. So what do you do? Start calling people you know. I was using my own network to enable us get the job done. There was COVID. Even if they had the data, get into the office to get it was a challenge. And then there’s this limited time that has been defined. If you look at the announcement, it was delayed and postponed, they were waiting for us. They were waiting for us and saying Degeconek, what’s wrong with you? Everybody is waiting; the country is waiting for you.’ And in the midst of that, we told them “what we are getting to you, by all intents and purposes, are not real competent persons reports,” and they said “don’t worry, it’s okay like that, we’ve crossed that bridge, don’t worry, just continue the way you are doing it, we cannot reverse that because the president has approved, because we explained this process.” That’s how we pushed out what we pushed out.
How did we do it internally? How did we cope? We had to first of all, expand the letter; it was no longer 13 people, but everybody. We had a shift in Dolphin estate (in Ikoyi, headquarters of Degeconek); if you know anybody in the neighbourhood of our office in Ikoyi during that time, you could ask them. We had to identify where the guesthouses are and moved the team; everybody was caught. There were those who will close at night; the married people with family, we put them in the daytime shift so they can finish and go home. There are other people, including some married people as well, that will resume at 7pm and close by 6am in the office. So we were doing night shift and daytime shift just to do that work, it’s unprecedented. I didn’t even know it was possible. Now, I being the presiding officer, the CTO of everything, mean I work with both the day people and with the night people. So I was wondering whether I’ll be sitting or I will be talking and I cannot be in both places at the same time. So I sit in front of my system and I was constantly responding and verifying. And it was difficult; it was an extremely difficult situation for us to work in that condition. But that was late already; it took that much effort to get to that point. We had to do all of that to get the job done. So you can imagine proofreading, it’s me. It was also me saying: “Okay, let’s review what has been done. This is not right. Okay, you guys do this, then we go and take a nap for two hours. Let me have it on my WhatsApp, I saw to it that we created all manner of group chats, discussing economics. We created the operational factory to manufacture these to the final product. We’re doing that all through. And at the end of the day, we had to deliver on the job. Am I satisfied with the quality? Do I guarantee that that’s the best? Probably not, because in the reports we had some errors; we’ll be talking about Akinosho’s field for instance, and Paul’s field name will show up. That’s because there were a lot of cut and paste. So there were all sorts of error messages here and there that came up. But then we got people, participants now, that by the time the announcement started and the process started, that said “Oh Thank you, what you’ve done at least gives us the first level of information that was never there”. And then I managed to tell the DPR that “in your processes give the bidders the opportunity to also evaluate on their own, even though the time was short, just give them the benefit to evaluate on their own and come up with something”. I know that there will be errors. I’ll give an example. The fiscal regime, in the midst of the fury, they copied and pasted the wrong fiscal regime. So some of the people that understood had to rerun the economics on their own, they were okay with the technical part, the economics was wrong on the wrong premise. So it was a mixture of The Good, the Bad and the Ugly in terms of delivery. I know it by my own personal standards; that’s what it came to be. But here we are, there’s no choice. There’s no option. You know, Nigeria, is looking for money, government is broke, and a lot of things falling apart, they needed this process to move forward, no matter what. That’s what we did.
So in the subsequent agreement I signed with DPR, I’m not allowed to bid, I’m also not allowed to evaluate. I interpreted that to mean I shouldn’t be offering services, you know, after doing that, a lot of people will want to consult you. We couldn’t do that; we had to find another entity that would do that, even though we made inputs into that entity, so Degeconek remained where we were: consultant to the process. And we remained that way. That’s what we did, from beginning to now.
Well Integrity & Reservoir Surveillance
“We’re now all over the Map
We’ve been to Angola, Kenya, Benin Republic, and Ghana; we have a foot at the door in Senegal also.
Petroci had a block called CI-11. It’s the one that they are operating, it’s offshore; they needed slick line services and part of the services was to check for the well integrity. These are old wells, relinquished by the likes of CNR.”
So for the process, the announcement was made in June 2020. And then it ended in September 16 with submissions that technically ended our role. In fact, all roles to DPR ended when we submitted the materials to them. So what then happened was, they developed their own internal processes to process forward from there. So September 16, 2020, was bidders’ deadline for bidding; but there were counter accusations that the bid extended beyond that. It opened the door for some people to submit later. We were completely out of the process in that situation. So December 6, 2020, was when there was first announcement of shortlisted companies. And then March 8, 2021, was when bidders got a letter stating the amount for the signature bonus for their field. We were not in that process of determining what the signature bonus eventually became.
When you say that the data prying was different from leasing data and taking it, it means that outside of those two hours of data prying, you actually can still officially get data for fuller interpretation?
You need data, you bought data; part of the money paid was for data. Yes, for example, if you are bidding, and you know that Degeconek was involved in the process, you know you can give me a call and say Biodun, what kind of stupid data is this, it’s so small, I can then tell you okay, maybe this is what you need to do about that. But that’s generally what happened; it’s not in all cases that the data was small. The data were adequate in a number of respects. But if you remember the 2002/2003 licensing round too, data sizes were stamps. Austin Avuru had about 119 square kilometres for Platform Petroleum, Pillar had something quite big between Umusati and Ugbuku to the south, those are big surface areas of their farm out areas. In the same manner you have Bayelsa State that has Atala it is only seven kilometers, yet everybody bided and paid one uniform signature bonus, $150,000. So, we had this kind of mish mash type of situation. But you know what it is, it is what it is, that’s what happened.
