For six years, Osa Oweiadolor was Managing Director and Chief Executive Officer at Platform Petroleum, a leading operator of Marginal Oil Field in Nigeria’s Niger Delta. Since taking early retirement from the company in 2021, he has run Trustrock Energy, a consultancy which helps to hand-hold emerging operators in the industry. He sits on the boards of Midwestern Oil & Gas Ltd, Transnational Energy Ltd (Licensee of PPL 221 Marginal Field), Nosak Distilleries Ltd, Shepherd Trust Microfinance Bank, and Magboro Power Company Ltd, among others
He recently fielded a range of questions around industry issues from Africa Oil+Gas Report correspondents, Foluso Ogunsan and Akpelu Paul Kelechi
Excerpts from the interview by Foluso Ogunsan
AOGR-You were the CEO of Platform Petroleum for six years and COO for five years before then. That company produced an average of 3,000 barrels of oil per day under your watch, and it was a consistent performer. Before your departure, you’d overseen the start of supply of at least 30Million standard cubic feet of gas per day into the Nigerian Gas Infrastructure Company (NGIC). System. That’s a lot of experience, so what, in your perspective, was your major fulfilment in the 14 years or so that you served both as an employee of Platform and its Chief Executive Officer?
Owieadolor-For fourteen and half years, I was with Platform as a staff and of course, for over a decade I functioned initially as the COO and later as the CEO. Joining Platform right at the foundational phase threw up the opportunity of building a pioneer Marginal Field operator from all the way to First Oil. We also had the responsibility of setting up the structure beyond First Oil,. We had to ensure filling the talent pool to work for the company. What legacy means to me is more than sustaining liquid hydrocarbon output and monetising gas resources. It would be the building of a formidable team of young, competent E&P professionals from the Geology and Geophysics (G&G) to the Operations and Maintenance (O&M), Finance and all the other non-technical staff. It was a team that had a lot in them in their thirties, in their forties and today they’re all excelling in their various capacities where they’re serving. Contributing to the building of a company from foundation that is today regarded as one of the strongest brands amongst indigenous oil and gas companies in Nigeria is one of my biggest legacies.
Are you continuing in this direction of building a legacy of human capital development?
Some of the marginal field companies I’m involved in are in a phase that Platform once went through, so it’s very easy to replicate some of the things I have done in the past. But apart from building skills and mindsets, you have to ensure that the right strategy is adopted for development of the asset. You have to ensure that you have optimum financing and all the other things that you need to run an efficient organization.
“I am not eager to take up he CEO role in a large, indigenous Nigerian company. I would not be eager to take it. We must not be recycling the same set of people over and over again..’’
The Petroleum Industry Act (PIA) was enacted about four years ago. How would you evaluate the on-going evolution of the Nigerian Upstream sector as we implement the law?
Overall, there’re a number of achievements. We can directly point to the PIA that we concluded the last Marginal Field Bid round in 2022. A number of those awardees have developed their assets to First Oil. So that’s a lot of value to all the stakeholders in terms of Tax and Royalty for government and value creation of employment and development in host communities. Some others are still working aggressively towards First Oil and we’ve seen a lot more stability in the industry. The PIA also brought clearer policy framework. We’ve also seen improvement in the area of crude losses, which used to be a major nightmare for everyone. At some point, we had losses in the range of 40, 50,60% depending on where you’re evacuating your crude from. But today some of those losses have reduced to less than 5% in some evacuation routes and there’s been overall production improvement. This has boosted national revenues, with the overall stability within the oil and gas producing areas as well. There’s also significant reduction in youth restiveness because you have a clearer policy framework for regulating host community management. It’s been a lot of positives, but it’s still early days like I said earlier.
What are your top areas of possible improvement-either for operators, or for regulators- in the short term?
Production improvement has a long way to go. There are a lot of short-term oil generation opportunities. In the next six months, there are all kinds of rig-less activities that some of these small companies can use to beef up their production. It’s a unique game of numbers, everything adds up 500 barrels per day here, 1,000, 2000 barrels per day there. It all adds up. So there’s some bit of scope to improve that. I ‘m impressed that several companies are doing a lot in In terms of gas monetisation. With better collaboration now, some of the new companies are building pipelines, gas pipelines for gas evacuation and there’s a better understanding of the commercial terms that guides the commercial aspects of the business of gas monetisation.
Is your own company- Trustrock Energy involved in the kind of well intervention and reservoir hook-up services like the Rigless re-entries you mentioned earlier?
No! We focus more on consulting. We consult and offer more of Advisory Services for most of the companies we work for. We guide them through the acquisition process, beyond the acquisition process, then we also guide through the development, negotiating critical agreements, for example Joint Operating Agreements etc. What brings the most fulfilment is seeing some of these companies bringing their assets to full commercialisation.
Osa Owieadolor, Chief Executive PPL
From where you sit, what is the lowest hanging opportunity in the Nigerian E&P space? What is the quick reach in the Nigerian E&P space presently?
Quick reach, lowest hanging opportunities. There are a couple of Short Term Oil Generation (STOG) opportunities; some wells that would have been shut in for some little reasons; pipeline vandalization, choke-box problem and a few other things that are essentially rigless. You don’t need to go through the process of getting a rig to intervene in such probes because that has a much longer lead time. Then again gas monetisation. A number of companies are still flaring their gas. But with improvement in infrastructure across the region; just building some short evacuation lines and some little bit of investments in compression systems, you’re able to monetize some of these gas molecules that were initially stranded and were being flared. You may also look at issues around optimising your supply chain management. You could easily save 20-30% of your overall costs if you’re able to optimise your supply chain management very well., There’re a lot of leakages as a result of processes that could have been a lot faster to achieve, processes that will have a lot less bottlenecks. So again, we expect that these are some of the values that you’d get from the indigenous companies, because the perception is that the IOCs have a lot more bottlenecks in terms of the supply management processes. So I see all of
“Small” companies always complain about funds. Is lack of funding not one of the reasons they’re not taking advantages of these short-term -oil –generation- opportunities you mentioned?
Funding is one of the biggest challenges facing most of the indigenous companies today, especially the last batch of Marginal Field Licences. We had a Signature Bonus that was on a very high side. The best strategy when you’re talking of Marginal Field development, you need to have a clear line of sight beyond just paying Signature Bonus, to funding to your First Oil. The moment you begin to produce and establish cash flow, then it’s going to be a lot easier for you to fund your operations. I have seen a few companies find ways around it somehow through strategic collaborations.
You have left Platform for four years now. If you were called back to be the CEO of one of these leading indigenous companies eg. Seplat or Renaissance, would you be willing to take the offer?
I would say not eager at all! I would not be eager to take it, but again, you can never tell.
“GAS IS EASIER NOW-just building some short evacuation lines and some little bit of investments in compression systems, you’re able to monetize some of these gas molecules that were initially stranded and were being flared.”
So what company can make you change your mind, even though you’re not eager?
You can’t tell for now. As professionals, you keep all your options open. So when you get to that bridge, you will find a way to cross it. You will take an appropriate decision that will be fit for that context and that particular circumstance.
You’ve never been afraid to speak your mind in the Nigerian Oil and Gas Industry. Your very public lament on Signature Bonus, five years ago, is one of them. What are the things that the Nigerian policy makers and regulatory agencies are still getting wrong? I want to link that with the most recent (2024)Bid Round. There were companies that we’ve never really heard of that were winning two blocks, two licences for Deepwater. An there were companies like Stardeep (Chevron), TOTAL who were losing bids to rank unknowns?
Nigeria’s oil industry professionals have built sufficient technical and financial capacity in the onshore and around shallow water terrains. We can play very conveniently in those spaces. But when you begin to look at deeper offshore, we need to tread a little bit more carefully, take it one stride at a time, and grow sustainably. I would suggest that we consolidate on the capacity that has been built in Onshore, Swamp and shallow offshore areas rather than rushing to move into the deep offshore. In terms of some of the policies that can be seriously looked at, Signature Bonus is key. We expect that in future bid rounds the Signature Bonus should be kept at as low as possible, so as to incentivize the awardees and mitigate the funding pressure. We must always look beyond the Signature Bonus. We need to have a line of sight beyond the Signature Bonus, all through to the development of the asset to First Oil.
When you were running Platform, the company got deeply involved in gas monetisation. What advice would you give the regulatory authorities as they battle with ensuring that the Gas Flare Programme actually delivers value in terms of projects arising from the usage of this gas?
A number of companies are not comfortable flaring. As a result, they’re channelling a lot of efforts towards ensuring that they’re able to clean that as quickly as possible. For example, a company is flaring as low as four to five million standard cubic feet of gas on a daily basis, if you annualize that, it’s well over nine million dollars that you’re going to be spending just on penalties. If you decide to channel that into the funding of infrastructures, it’s going to go a long way.
There’s also the issue of Drill or Drop. Companies are now given this directive, within a particular space of time, over a field, you actually have to work the entire asset and you produce within a particular period of time. It was what Gbenga Komolafe, Commission Chief of the Nigerian Upstream Regulatory Commission, said as he inaugurated the Bid Round of 2024, that within a particular period of time, there was a Drill or Drop that could be applied. What is your take on the Drill or Drop? Some Nigerian companies have had some of those fields for years and have not done any work, infact there’s one that paid a hundred million dollars as penalty. What is your take on the Drill or Drop?
It depends on where you’re sitting. From the side of the government, you want to introduce some of those measures to discourage asset owners just sitting on the asset. But outside of that, you still recognize the fact that the regulators have a very strong role to play in encouraging investments. As a rule, some of these are best practices globally, but the implementation is what matters. You need to strike some balance. They’re not straight-jacketed. You have to look at individual circumstances. They’re not things you apply as a blanket rule. You look at individual context. You look at the asset, you look at the players, you look at their Field Development Programme, look at the funds that have come in. You look at the effort put in, you look at the progress that has been made and overall you can make an informed judgement on how it should be applied. It’s not a rule that should be applied across board generally for everybody. The specific context of the asset and the operator has to be seriously factored into such a decision.
What keeps you up at night presently given all the experiences you’ve had, the fact that you’ve moved on, the fact that you’ve established your own firm that is saddled with taking other companies from inception to first oil. Then you still have to take this relatively new company through the process of getting human capital that you train to help you run the process, and then still deliver value for the company’s shareholder which you’re consulting for?
I’m relatively busier than I was while was in the 9-5 structure. The only thing that is different now is that you have a lot more under your control. Admittedly there’s a lot more leverage to decide on what to do and what not to do. The pressure is a lot less. What keeps me awake? If you ask me today, one of the things I really get worried about is the very huge knowledge gap between the old generation of professionals in the industry and the young ones that are coming up. There’s a very huge gap. Succession planning is a major issue and you see it across most of the indigenous companies in the industry, succession planning is an issue. And that is why you see a lot of companies working around the old professionals, retirees. A lot of them are called back and offered consultancy positions to support work programmes, support development and all of that. So I think there’s need to go back to what we used to have. I recall that back in the days, on a yearly basis, we had graduate trainee programmes in most of the IOCs then. A few of the indigenous companies are gradually introducing it, but there’re still far from where it should be. So these are programmes that should be deliberately pursued by all. We need to have a graduate trainee programme. I don’t know the government through NUPRC may be able to come up with a policy framework on that that will mandate our indigenous players to have a percentage of their staff to be in that category. Once you have them in that category, you now have to also a competency framework through which you’re able to develop them on an annual basis then you can now build capacity.
You basically understand the oil and gas industry, why did you choose to go into consultancy? Why didn’t you choose to align with someone with deep pockets who wants to get into the oil game but does not understand the oil game and serve as a managing director on a share basis and raise another small to medium size Nigerian oil and gas company that has an asset of 20 million barrels recoverable, work with them for decade and exit? Why did you go straight into consultancy?
“DRILL OR DROP RULE: Implementation is what matters. You need to strike some balance: look at individual circumstances. They’re not things you apply as a blanket rule. You look at individual context. You look at the asset, you look at the players, you look at their Field Development Programme, look at the funds that have come in…”
You need to be aware that I spend less than 20% of time today on the consultancy business. I told you I sit on a number of boards. Within the first year of my leaving Platform Petroleum, I had several invitations from a couple of companies across sectors – oil and gas, financial services and manufacturing and ofcourse from Non-profit as well. All of these are also some of the things that take my time. I heard what you said, but if I attempt to answer your question, I’ll have to disclose so much to you. But overall, this business is a marathon business. It’s a longterm business and for a longterm business, some of us are aging, so the kind of energy I had when we were building Platform, I was in my thirties when we were building Platform. I left Platform at 51 or thereabout, today I’m already 55 and you’re expecting me to come back, join another company and spend another decade, decade and half. That’s not the kind of country we want to build. By doing that, I’m going to be displacing the space of some other young professionals that can be developed. We have a lot of young petroleum engineers, geoscience graduates and other professionals that should be encouraged, we need to have a proper development programme and get them to fill all of these spaces. We must not be recycling the same set of people over and over again. So this is one of the things that keep me worried. We have to be deliberate about it. You don’t want to have the same people occupying the space. It’s the same kind of thing we complain about in the political space. Same politicians you’ve been hearing of over the decade, are still the ones there. So we don’t want to transfer the same culture to the oil and gas, otherwise it’s just going to become a oligopolistic, well that is what it is, you don’t want to push that too far. You must do everything to discourage an oligopolistic system in the industry. I joined Platform in 2007, I was 37 then and left when I was 51. A fourteen year sojourn.
