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BP’s Board Gets Rid of CEO After Whistleblowers’ Allegations

Bernard Looney has suddenly resigned from the position of Chief Executive Officer (CEO) of BP, the European major.

Murray Auchincloss, the Company’s CFO, will act as CEO on an interim basis.

From the company’s press statement announcing the exit, the resignation was a result of a 15+month long series of investigations conducted on Mr. Looney as a result of a number of whistleblowers’ allegation.

“In May 2022, the Board received and reviewed allegations, with the support of external legal counsel, relating to Mr. Looney’s conduct in respect of personal relationships with company colleagues”, the company sys in the statement. “The information came from an anonymous source.

“During that review, Mr Looney disclosed a small number of historical relationships with colleagues prior to becoming CEO. No breach of the Company’s Code of Conduct was found. However, the Board sought and was given assurances by Mr. Looney regarding disclosure of past personal relationships, as well as his future behaviour.

“Further allegations of a similar nature were received recently, and the Company immediately began investigating with the support of external legal counsel.   That process is ongoing.

The British engineer who succeeded Bod Dudley as BP’s CEO in October 2019,  eventually informed the company that he now accepted that he was not fully transparent in his previous disclosures,  BP’s statement says.  “He did not provide details of all relationships and accepts he was obligated to make more complete disclosure”.

BP says it has  “strong values and the Board expects everyone at the Company to behave in accordance with those values.  All leaders in particular are expected to act as role models and to exercise good judgement in a way that earns the trust of others”.

The company adds that “No decisions have yet been made in respect of any remuneration payments to be made to Mr Looney.  In accordance with section 430(2B) of the Companies Act 2006, particulars of any such decisions will be disclosed at such times as, and to the extent that, any such decisions are made”.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 of 16 April 2014 (MAR) as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

 


Shell Appoints Leye Falade as Country Chair in Hot Spot Namibia

The Nigerian engineer, Leye Falade, has been appointed as Country Chair for Shell in Namibia.

In the role, Falade has the overall oversight of the multinational’s ambitious technical, managerial and regulatory activities, in one of the world’s hottest hydrocarbon exploration jurisdictions.

The new country chair was, until August 31, 2023, the General Manager in charge of Production at the Nigeria Liquefied Natural Gas (NLNG) Ltd.

He takes over from Dennis Zekveld, who has held the fort since Shell returned to Namibia for exploration in 2014.

Falade’s Linked in profile describes him as an “experienced senior business leader with a demonstrated history of working in the oil & energy industry, who has worked across upstream and midstream assets in seven different countries across Europe, Asia, Middle East, Russia and Africa”.

By his own account, he is skilled in Gas, Petroleum, Product Optimization, Engineering, business improvement and change management.

He has “strong energy professional with an engineering degree and a MBA from Henley Business School, UK”, he explains.

Falade is taking over after the initial exploration work has been successfully done and the maturation phase begins. He is to superintend the clear line of sight to delivery at the terminal.

Namibia has witnessed a string of elephant sized oil and gas discoveries in the last 20 months. By some estimation, over Four Billion (probable and possible) barrels of oil and gas equivalent have been discovered by Shell and TOTAL, in the country’s deepwater Orange Basin, which also straddles South Africa.

Shell was a player in Namibia in the 1990s to early noughties, when it made the decision to exit the development of Kudu Field, the country’s only-if problematic- discovery at the time. In the 12 years between that exit and the return, Namibia’s exploration fortune hung in a “hoping“ mode. There were several dry holes drilled by several independents, the most notable of which was HRT, the Brazilian explorer.

Since arrival in 2014, Shell has completed three seismic surveys, analysed the data, and launched a hugely successful drilling campaign. Shell’s mega-discovery with the Graff-1X well, located in Petroleum License (PEL) 39, came in the first quarter of 2022, 20 years after its exit from Namibia. Shell operates PEL 39 with a 45% working interest and partners include Qatar Energy with 45% and NAMCOR, the national oil company of Namibia with 10%.

 


Keith Hill, the ‘Landlord’ Leaves: End of an Era in Africa’s Frontier Exploration

Keith Hill, who led Africa Oil Corp to purchase a profitable chunk of Nigeria, and witnessed, as partner, Tullow Oil’s opening of Kenya as an oil province, is leaving the Canadian junior as President.

He has been replaced by Roger Tucker, a one-time Senior Vice President Europe, for BG Group.

Hill is the last of the CEOs of those Western headquartered juniors who opened frontier basins around Africa, plotting them on the hydrocarbon map of the world, between 2005 and 2014.

Keith Hill was focused on the East African Rift sequence and Southern African deepwater miogeosynclines.

In 2007, Africa Oil Corp executed a string of agreements with three governments, to earn it 90% stake in 13 acreages, spread over 250,000km2  in Kenya, Ethiopia and Somalia. Hill became the AOC’s Chief Executive two years after those transactions and led the company to derive value from the deals by playing the Landlord.

Hill never risked a single dollar on drilling a well, but he worked up the seismic and other petrological data and presented highly annotated play maps to convince well-heeled companies of the possibility of working hydrocarbon systems in those unexplored frontiers.

AOC sold percentage stakes in several of these acreages to Tullow, Marathon, and New Age.

The discovery of oil by Tullow in one of the Kenyan tracts in April 2012 boosted the quality of the property and bolstered both M. Hill’s and AOC’s reputations.

AOC was smart enough to diversify into acquiring producing properties, in the aftermath of the collapse of the frontier exploration boom. In January 2020, it bought a 50% ownership interest in a subsidiary of Brazil’s Petrobras, specifically Petrobras Oil and Gas B.V. (POGBV) whose primary assets of POGBV consisted of an indirect 8% interest in Oil Mining Lease (OML) 127, containing the Agbami Field and an indirect 16% interest in OML 130, containing producing Akpo and Egina fields.

The company has raked over $350Million in quarterly dividends from that purchase.

Under Keith Hill’s direction, Africa Oil Corp. has been at the right place at the right time. Even today, when the juniors are no more leading the charge in opening new African petroleum basins, it is one of the few Western minnows with stakes in what may become the biggest African discovery in the last 20 years: the Orange Basin offshore Namibia.

Roger Tucker who is Hill’s successor, has had extensive experience running and developing businesses in multiple and varied international environments. He was Senior Vice President Europe, for BG Group; CEO of African Arabian Petroleum Ltd., and Latitude Energy; Managing Director of Yukos Oil; and President LASMO Venezuela and a member of LASMO’s Group Executive Committee. More recently he was Chairman of Viaro Energy and has experience in private equity through Senior Partner-level positions at Prostar Capital and Vanwall Capital. He is currently a Non-Executive Director of PetroTal Corporation.

Mr. Hill has agreed to remain on the Board as a Director of the Company with Dr. Tucker also joining the Board as a Director. The handover will take place on September 5, 2023, and Mr. Hill will continue to lead the Company until that date.

This piece was originally published in the June 2023 edition of the Africa Oil+Gas monthly magazine.


NAMCOR’s Mulunga Cleared of Charges, But May Not Get His Job Back

By Sully Manope, in Windhoek

Immanuel Mulunga, the flamboyant Chief Executive of NAMCOR, Namibia’s state hydrocarbon company, has been cleared of charges of sleaze by the country’s Anti-Corruption Commission (ACC).

But the man who has acted as the face of Namibia to international companies willing to access the country’s petroleum potentials, may be on his way out. While his suspension was simply about payment for an asset stake, there’s a deep-seated animosity in the NAMCOR board of directors that may result in his ouster.

Mulunga has been NAMCOR’s CEO for eight years. He arrived the job after a five-year run as the country’s Petroleum Commissioner.

For close to 15 years of “Namibia waiting to exhale”, he was the man who sold the country at international petroleum conferences all over the world. With supersized discoveries by Shell and TOTAL, Namibia has become, in the last two years, the hottest exploration spot on the African continent.

Part of the statement by Paulus Noa, the ACC chairman, sounds more like a praise for the suspended CEO than a review of charges.

“The managing director (MD) was not given approval by the board (of directors) when he authorized the transfer of the money to Sungara Energies Ltd”, Noa said. “He, however, did so in the interest of NAMCOR and the country, after the board was consulted and kept on deferring the discussions and decision on the matter,” Noa said.

Sungara Energies is a joint venture between NAMCOR, Britain’s Sequa Petroleum and (the Nigerian) consulting company Petrolog.

The payment in question allowed the JV to ensure that its planned acquisition of a 10% stake in producing Angolan oil Block 15/06 did not fall through. After it had paid its own $10Million share towards the acquisition, NAMCOR discovered that its partners did not have the financial resources to pay the whole of their initial contributions. In August 2022, therefore, Mulunga, ordered that $6.7Million be transferred to Sungara to ensure that Songangol, the Angolan state hydrocarbon company, did not cancel the sale and purchase agreement for the block.

Noa said that the payment was a matter in which Mulunga had to make a difficult decision to safeguard the contract and avoid financial loss to NAMCOR and the country.

NAMCOR’s board chairperson Jennifer Comalie indicated in her own assessment during the ACC’s investigations, that Mulunga’s action was a breach of delegation of authority.

But Noa offered that Comalie highlighted that Mulunga did not act with criminal or malicious intent, and she also confirmed that the total deposit paid by NAMCOR was paid to Sonangol, and the minister of mines and energy was informed about the development of the oil block deal.

Deputy chairperson Tim Ekandjo’s sworn statement “confirmed that the board had approved Namcor’s participation in the Sonangol oil block deal through a joint venture between NAMCOR, E&P, Sequa and Petrolog, who then formed Sungara Energies Ltd.

“The board passed a resolution to delegate the MD to be NAMCOR’s representative on [the] Sungara joint venture,” Noa reported.

Despite the ACC’s clearing him of charges, NAMCOR’s board will proceed with disciplinary hearings and investigations into Mulunga’s conduct.

It so happens that Ms. Comalie, the NAMCOR board chair, had been arrested after drugs were found in her car. She considers that as a set up by Mulunga, who, our several sources, say, has been impatient about what he considers as a largely incompetent board.

 

 

 

 


George- Ikoli Takes a Seat on PWYP’s Global Council

The Nigeran lawyer Tengi George-Ikoli has been appointed to the Global Council of Publish What You Pay (PWYP), a civil society movement of more than 800 organisations spanning 50+ countries that enable people’s right to information and participation in natural resource governance.

Ms. George Ikoli is the senior officer at the Natural Resource Governance Institute (NRGI), a member of organisation  of the PWYP movement. She is one of the 10 representatives elected this year to form the Global Council.

That election occurs every three years; filling seven seats reserved for sub-regions, two for member organisations with global reach and one for an Africa Steering Committee member. George-Ikoli is one of the two on the Council who were elected from “member organisations with global reach”.

She was nominated by her colleagues at the NRGI; Suneeta Kaimal, CEO President, Patrick Heller, Chief Programme Officer and Nafi Chinery, Africa Director, to take over from Evelyne Tsagué, the NRGI’s Africa Capacity Development Advisor.

“The council makes overarching recommendations to PWYP’s Board and Executive Director, ensures governance standards for national coalitions, and oversees coordination mechanisms between the regions”, the PWYP says on its website.

“Accountable to the Global Assembly, it works by consensus, voting on decisions only when necessary. With the Council is truly representative of PWYP members, drawing on their many strengths to guide our campaign for open, accountable, sustainable, equitable and responsive governance in the extractive sector”.

George-Ikoli is based in Abuja and works on NRGI’s project “Oil Dependency in Nigeria,” which aims to imagine a future without oil. The project will re-think oil’s role in Nigeria’s economy in light of the petroleum sector’s declining performance and the uncertainties caused by the global shift to cleaner energy. She holds a joint honours LLB in law and economics from the University of Wales, Swansea, and an LLM from the University of Bristol.

Prior to joining NRGI, George-Ikoli worked as the programme coordinator for Nigeria Natural Resource Charter (NNRC), implementing the charter, a set of economic global best practice principles, to advance the interests of the Nigerian economy and its citizens in the management of the country’s natural resource endowments. In her role she collaborated with stakeholders to strengthen revenue management, ensure local communities benefit, promote oil and gas industry efficiency and enhance transparency and accountability in the extractive industry.


Thierry Tanoh, Former Ecobank Group CEO, Joins the Board of Afentra

Afentra has announced the appointment of Thierry Tanoh to its Board as Independent Non-Executive Director and Chairman of the audit committee.

Tanoh, aged 61, is an experienced senior director with global experience, a strong track record in both public and private sectors, and has held senior positions within African Government ministries. Mr. Tanoh’s relevant experience includes various roles within International Finance Corporation (IFC), including being Vice President within the Senior Executive Team and a member of IFC’s credit committee based in Washington, and Director of Sub-Saharan Africa based in Johannesburg.

Following 12 years with IFC, Mr. Tanoh was appointed as CEO of Ecobank Group, a pan-African banking conglomerate with banking operations in 33 African countries. Following his departure in 2014, Mr Tanoh was appointed a member of the office of the President of the Republic of Cote d’Ivoire, serving initially as Minister, Deputy Chief of Staff before being appointed as Minister for Oil, Energy and Renewable Energies between 2017-18.

Mr. Tanoh presently has a number of Director roles including as Non-Executive Director, Vice Chairman of the Board of Directors and Chairman of the Investment Committee of Maha Capital Partners, an investment management company, Chairman of the Board of Directors of a Mortgage Refinancing institution and was recently appointed to the President’s Council on International Affairs of Yale University.

Mr Tanoh is a Certified Public Accountant (CPA, France), was awarded the Fulbright Scholarship and received an MBA from Harvard University, and was awarded the World Bank Group Leadership and Diversity Award in 2006.


 Boards of NNPC, NCDMB, NUPRC, NMDPRA Dissolved: CEO Positions Tenuous

  • Mele Kyari & Others to report to Perm Sec. Gabriel Aduda
  • Boards dissolution throws up, in high relief, the issue of tenure of the Chief Executives

With the dissolution of Governing Boards of all Federal Government parastatals, agencies, Institutions, and government-owned Companies, President Bola Tinubu has effectively dissolved the boards of the four key parastatals of the Nigerian Ministry of Petroleum.

The statement instructing that the Chief Executive Officers of the Parastatals, Agencies, Institutions, and Government-Owned Companies “are directed to refer matters requiring the attention of their Boards to the President, through the Permanent Secretaries of their respective supervisory Ministries and Offices until such a time new boards are constituted,” effectively means that  the CEOs of NNPC Ltd, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria Midstream, Downstream Petroleum Regulatory Agency (NMDPRA) and the Nigerian Content Development Monitoring Board (NCDMB), will, in the next few weeks, be engaging the offices of Gabriel Tanimu Aduda, the Permanent Secretary Ministry of Petroleum Resources (MPR).

“Permanent Secretaries are directed, also, to route such correspondences to Mr. President through the Office of the Secretary to the Government of the Federation. Consequently, all Ministries, Departments and Agencies are to ensure compliance with the provision of this directive which took effect from Friday, June 16, 2023”, the statement says.

What this dissolution of the boards of the parasails throws up, in high relief, is the fraught issue of the tenure of the positions of the CEOs.

The most contentious CEO position in the petroleum industry is that of the CEO of NNPC Ltd, despite the fact of the whittling down of the company’s influence as the be- all and end- all of the industry by the Petroleum Industry Act (PIA), which grants sweeping powers to the regulatory bodies: NUPRC and NMDPRA.

But in terms of clear sight to rent, which is the prism through which the Nigerian political elite eye positions, NNPC controls more budget and therefore, commands a lot of fire power.

This is an evolving story.

 

 

 

 


How to Build an Oil Producing Company

By Austin Avuru

On July 1, 2002, I moved into a modest 3-room office on the 3rd Floor of Bankers’ House in Victoria Island, as Managing Director/CEO of Platform Petroleum Limited. The space was availed to us by one of our shareholders, Wilbahi Limited who was the lessee of the entire floor. As staff, I only had my secretary, whom I hired to start work on that day and my driver who moved with me from Allied Energy Resources Limited. It was in this office that we compiled the two bid packages that we submitted to the Department of Petroleum Resources (DPR), the regulatory agency. I still remember that evening on the closing date for submission. We had just bound the two submissions and I had just picked them up to rush off to DPR for submission when my secretary and driver stopped me and insisted that we must pray over the documents. I am Catholic and they are both Pentecostal Christians. They took turns to fire those typical Pentecostal prayers over our submissions with our three hands placed on them. Well, the rest as they say is now history.

Having won the Asuokpu/Umutu field, it was now time to set up a proper structure and start planning how to develop the field and build a company in the process. The starting point was fund-raising. Shareholders had paid up a total of ₦25,000,000.00 (Twenty-five Million Naira) for 25Million shares at the point of winning the field. Twenty-five Million shares had, therefore, been allotted in line with actual subscriptions paid. After winning the bid, the share price could no longer be ₦1.0. The first Rights Issue, intended to raise money to pay the prescribed signature bonus of $150,000 was, therefore, priced at ₦8.33 per share. 3.5 Million shares were offered (in the proportion of individual shareholdings), raising our paid-up shares, post issue to 28,500,000 shares. At the close of the offer period, eight subscribers paid for their rights and picked up additional shares from the other eight who did not exercise their rights. We realized ₦29,155,000 which was $208,245.50. Exchange rate was ₦140/$. We paid our signature bonus, secured the field and still had some money in the bank to keep the office running. At the end of this rights issue, the shareholding structure changed slightly, reflecting the levels of subscription.

Now, it was time to raise the money to develop the field. We decided to bring in a financial Partner/Investor to whom we were prepared to cede 40% undivided interest in the field. I prepared a 36-page Information Memorandum, a comprehensive marketing document which detailed the field resource potentials, planned development strategy, budgets, activity schedule to first oil, projected production profile and field economic evaluation. Details of the company structure, management team and board were also included. By this time (2004), Dr. E. M. Daukoru had been appointed, Petroleum Minister and so had to leave the board.

I pitched several potential funding partners, including the Delta State Government to acquire the 40% stake of the field on offer. In the end, Newcross Petroleum Limited, a company promoted by Dr. Festus Fadeyi, showed interest. We negotiated and reached agreement to assign a 40% undivided interest in the Asuokpu/Umutu field to Newcross Petroleum for a farm-in fee of $800,000.

Looking back several years later, I realized that my background and personal characteristics made me a very poor negotiator. I think that every negotiator should possess a certain minimum level of greed (while being reasonable and realistic) to achieve the best negotiated results. But greed is one quality I lack! Added to my frugal background as a paid worker who was always satisfied with the salary I earned, I was really excited at the prospects of Platform Petroleum earning a farm -in fee of $800,000! For me, however, my focus was simply having my problem solved. I was looking for a financial partner and I got one, with almost a million dollars to our credit! This solution driven modest approach to negotiations would become a trait of my entire corporate experience.

Anyway, I dutifully saved up the money as it would become the base of our working capital. All the contributions by shareholders, through subscriptions and rights issues up to this point, amounted to about $850,000. From this point on, I decided that I would not task shareholders with any further equity contributions. It was time to get creative and raise the required funds to develop the field and build our company.

Dr. Fadeyi was, at the time also the Chairman/CEO of Pan Ocean Oil Company, an old well-established company producing over 10,000 barrels of oil per day. If we allowed Newcross, they had the resources to fund our operations 100% and even fund our overhead if we chose that route. But then, we would lose our right of operatorship. We could not stay in control and use this opportunity to build capacity as a company if we handed over operatorship to our rich partner. This was, therefore, out of the question. We had to raise our own money and be able to pay our 60% cash call as we embarked on the field development.

One option was to raise about $3 – 4Million through another rights issue. But I thought I had tasked our shareholders enough. More than half of our shareholders were modest retirees, who were my former bosses and/or colleagues living on pension. If I did a rights issue of this magnitude, more than 60% of the Company would be cornered by the 3 or 4 shareholders who had the money and the rest of us would be at their mercy. I was not going to allow this to happen. I sought help from an experienced financial consultant who came up with the option of Platform selling investment notes to her shareholders. We designed a scheme to sell one hundred investment notes at $35,000 per note. Shareholders could introduce their friends to join them and invest. Seven shareholders took up a total of 77 notes while friends invited by two shareholders took up the remaining 23. This was how we raised $3.5Million which, added to the $800,000 farm-in fee and about $200,000 unspent balance from shareholders contributions, gave us about $4.5Million fire power and saved us from selling our operatorship birthright. It also preserved the shareholdings of the other nine Platform shareholders which would have been sharply diluted.

With initial funding sorted out, attention shifted to setting up the company and getting ready to work the asset. We built a 3-level Organization structure, with lean staffing but flexibility to grow as activities picked up.

  • Head Office: At the Lagos head office, I hired two deputies, one to supervise all technical/operational activities (Technical Manager) and the other to handle all support services (Finance, Admin, HR as Manager Finance and Admin). We subsequently hired two young Petroleum Engineers and two young geologists to support the Technical Manager and a finance Supervisor and Admin/HR Supervisor to support the Manager, Finance/Admin.
  • I brought in a very experienced Engineer (an Engineering PhD holder with over twenty-five years industry experience) as our Technical consultant. He would pull in other specialist consultants (drilling, completions, production etc) as needs arose and work with our in-house technical team. This did two things for us: utilise best-in-class expertise to execute our work programme and train/develop our in-house team who would ultimately take full ownership of the operations.
  • We set up a base office, to be headed by an experienced base Manager. In doing so, I deliberately chose to locate the base office within our host community. With the key building blocks and governance structure now in place it was time to develop the Asuokpu/Umutu Marginal Field. From our detailed evaluation of the field, two of the existing five wells were usable for production purposes. The combined technical team prepared a well re-entry, testing and completion programme, including the full budget, activity schedule and the composite list of possible service providers. We then contracted a 1,500 HP land drilling rig from DWC Limited on a day rate charter of $14,000 per day. We also engaged the services of drilling/completions supervisor on a day rate contract to manage the operations at the rig site. Once we were ready to mobilize the rig to site, I personally led a team of my key staff, (Technical Manager, Manager Finance/Admin and Base Manager) to initiate discussions with community leaders to ensure hitch-free rig operations.

This was one of the most difficult assignments I had to undertake. The Niger Delta was at the peak of its agitations and there was a total lack of trust between communities and any operating company. Worse still, the traditional governance structure in these communities (where traditional rulers and community leaders would usually hold sway) had been hijacked by militant youths, most of them fully armed. We were summoned to several rowdy rounds of negotiation meetings in each of the four communities that constituted our hosts. In each case, the youth leaders held sway, even though the meeting could be holding at the residence of the community leader or traditional ruler. There were threats, shouts, walk-outs, re-schedules and eventually, some form of compromise. The most funny of the requests I had to deal with was the issue of ghost workers. We had to negotiate a day rate and an agreed number of job slots for workers that would not physically show up. Such payments were to be shared by the youths. We also had to negotiate a “pass” (a toll fee) for every truck that brought in supplies/equipment to the drilling location. Even, after reaching agreement on all the items, we were still shut down for a few days when the rig was on location, usually to force us to accommodate some new, made-up demands by the youths. The youths were king!

In some cases, I was kept waiting for hours at the meeting venue because the youth leader was late in arriving. Most of these were antics to drive up their bargaining power, especially when the rig was on location and various day rates were counting.

In the end, we got the job done within budget. We tested and completed four oil-bearing intervals in two wells. With test results, which showed a combined flow rate of over 4,000 barrels per day of light oil, we were critically close to where we could borrow to supplement the equity funds contributed by both partners.

Next hurdle was to design and build a flowstation. I flew out to Houston to close out two contracts, one for a 10,000BOPD flowstation with three stage separation and the other for a Lease Activated Custody Transfer (LACT) Unit (also to a capacity of 10,000BOPD.) We made advance payments for both vendors to start the design and equipment manufacture. Back home, we awarded the civil contract for the preparation of the flowstation location, including the construction of a modest field accommodation within the flowstation premises for night duty field staff.

The most daunting task yet was the design and construction of the evacuation pipeline. I remember standing at the flowstation site and looking East in the direction of ENI’s Kwale/Okpai flowstation where our pipeline would run to. The thought of clearing a 15-metre pathway through the thick forest I was looking at, over a distance of 48km was frightening to me! It was at that point I knew that God created man to accomplish whatever he can dream up. After that experience, I never considered any project too big to take on.

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

 


My Life After Seplat

By Austin Avuru

In my last five years as Chief Executive Officer of Seplat I had an official, professional mentor resident in London, who acted as my sounding board on most critical decisions. As I was winding down, the issue of my post retirement plans came into stronger focus.

I was clear in my mind what I was going to do. In my planning, I started by isolating what I was NOT going to do….

  • I would not go into consulting
  • I would not run a contracting (Service) Company
  • I would not go into the Oil and Gas downstream business.

I decided that I was going to set up a Family Office – a family funded investment vehicle, through which I would incubate new businesses and manage any investments that I have. I zeroed in on four areas of interest that I would seek business opportunities….

  • Upstream Oil & Gas
  • Real Estate
  • Green House Farming
  • Investments in Nigeria listed equities.

I went ahead to set up an Isles of Man and Nigerian registered family trust, “Austin Avuru Holdings Limited” as the holding company for all my business interests. In the last two years of my service in Seplat, I held quarterly review meetings with my mentor and crystalized, both my succession plans in Seplat as well as my post retirement business plans. By August 2018, I started putting the building blocks in place.

I bought a piece of property on Oba Elegushi Road, Ikoyi, at the time occupied by a private primary school. There is an interesting story to the purchase of this property.

When my estate agents called me to inform me about the sudden availability of this property, I did not immediately have cash. The property cost ₦450,000,000.00 (Four hundred and fifty Million Naira only) and I could internally raise ₦150,000,000.00 (One hundred and fifty Million Naira). I called my GM Finance and the General Counsel in Seplat and asked them if they could arrange a short-term company loan of ₦300,000,000.00 (Three hundred Million naira only) which I would pay back as soon as dividends were paid in about six months. The General Counsel laughed out loud and announced to me that, that would amount to an insider loan to a director. She said it was a governance red flag and that it didn’t matter whether it was ₦3,000,000 or ₦300,000,000.00, the exercise was forbidden. I said to myself …. “So much for the monster I have created in the name of Corporate Governance”. But, so it was. The discussion didn’t go any further than that. Next, I put a call through to the MD/CEO of Platform Petroleum, my parent company where I was Vice Chairman of the board… “Are you guys able to advance me a soft loan of ₦300 Million. I will pay back within six months”. There was no hesitation in the answer . . . “Sure. When will you need it?” It did not surprise me; we had always run Platform Petroleum like a family and the compassionate requests of staff, directors and shareholders were always adequately attended to. The money was in my account in four days and subsequently I paid for the property. Of course, I paid it back within the promised time period.

We closed the transaction in November 2018 but because we could not disrupt the school calendar, we agreed to wait until July 3rd 2019 when the kids vacated for the summer holidays before taking possession. In the intervening period, we had concluded all the design work and processed the approvals for our proposed office building. Days after taking possession we moved in, demolished the existing buildings, and started the construction of our new office building.

In January 2019, I started the process of hiring the anchor staff for AA Holdings Limited. Working with a trusted HR Consultant, we went through a rigorous selection process to pick one out of four identified candidates for the position of Chief Investment Officer (CIO). We finally settled for a young, brilliant investment banker, Emeka Okolo, who assumed office on April 2nd 2019 in a rented office suite in Ikoyi. He quickly settled down to work, focusing on the following key assignments.

  • Supervised the construction, finishing, outfitting, and furnishing of the new office to top-notch standards. The office was finally ready at the end of November 2020, even though we moved in on September 1st, one month after my disengagement from Seplat.
  • Organised AAHoldings into a proper holding company with Professional Support Limited as a wholly owned subsidiary. All my shares in Seplat were transferred to Professional Support Limited while my shares in Platform Petroleum Limited were held by AAHoldings and Professional Support Limited. All my shares in listed securities on the Nigerian Stock Exchange were similarly transferred to AAHoldings. Two new subsidiaries, Professional Support Property Development Company Limited and Professional Support Farms Limited were created to warehouse our real estate and green house farming businesses respectively. A property which we owned, following our purchase of Nerine Properties Limited (part of Nerine Services Limited, a company ABC and I sold off due to pressures of RPT from Seplat) was transferred to Professional Support Property Development Limited.
  • Organised a beauty contest among four Communications Consultants for the design of our logo, letterheads, business cards and other stationery items. The chosen design from this exercise is what we use today.
  • Worked with Auditors and our retained external counsels to bring all statutory reports in respect of AAHoldings and all its subsidiaries to date. By the time I assumed duties on 1st September 2020 as Executive Chairman of AAHoldings, the audited annual report for all the companies for the year ended 31st December, 2019 (and all previous years as relevant) were ready and filed with the Corporate Affairs Commission (CAC). Similarly, tax returns had been filed with the FIRS for all the companies.

On September 1st 2020, one month into my retirement from Seplat, the AA Holdings office opened for business at 1C Oba Elegushi Road, Ikoyi. Apart from office support staff (security, maintenance, front desk, etc), there were four of us. . . . My executive assistant of eighteen years, the Chief Operating Officer, Mr. Johnnie Eni, who was the GM Business Integrity in Seplat, the Chief Investment Officer and myself. On October 1st, a Finance Manager, Mrs. Judith Alex-Oni joined us. When we prepared our 2021 Work Program and budget, the key highlights, which represented our four areas of investment interest were . . . .

  • Agriculture:

We decided to acquire a small parcel of land, about 1,500 square meters in the Lekki/Ajah axis of Lagos for a pilot project on greenhouse farming. Working with Dizengoff (a notable agricultural equipment supplier) we set up a greenhouse farm to produce pepper and tomatoes. After ten months of experiment, six of which was spent harvesting and selling products, we had enough data to start the planning of a larger scale farm. We acquired four hectares of land from the Lagos State Agric Scheme in Epe where we are now planning a proper, commercial greenhouse farm for Pepper and Tomatoes. We also have eight hectares of land in Delta State where we will expand into once the one in Lagos proves as successful as we envisage.

  • Real Estate:

Our first real estate project was the development of a service outlet for two anchor tenants on a 2,900sq meter plot of land we already owned in Ikota, Lagos It is a well-crafted building on four floors with one wing housing a restaurant chain and the other housing the film house cinemas (Imax). The second project, still at pre-construction stage, is an iconic 44-Unit luxury apartments complex on Alexander Road, Ikoyi. It is a huge project, and we are still twicking the design to achieve commercial cost effectiveness. To hedge our currency risk, we have also started acquiring (one piece at a time) commercial, residential real estate in the USA.

  • Equity Investing:

We have rationalized our holdings of Nigerian listed equities to three Nigerian banks which, in our view, consistently deliver above 7.5% dividend yield. We will continue to build on this portfolio to a point where our dividend income can support our Naira-based businesses and overheads.

The three sectors above represent our future areas of diversification away from Oil and Gas. To date, our big play still remains the Oil and Gas Sector.

Excerpted from My Entrepreneurship Journey, by Austin Avuru. Published in Nigeria by RADI8 LIMITED, Lagos, 2022.


Matola Takes Hold of Moza’s Leading Electricity Firm

Tomás Matola, the head of state investment bank BNI, has been named the new chairman of the Cahora Bassa hydroelectric company, HCB.

HCB is the largest company with public capital in Mozambique, with the State holding 85%; the Portuguese company REN has 7.5%; 4% of the shares in the hands of various national citizens and companies and 3.5% held by HCB itself.

Matola 44, replaces Boavida Mahambe, who has been the company’s Chief Executive since March 2021.

Matola  held various management positions in BNI over the last 11 years, and was Chairman of the Executive Committee in the last eight years.

BNI’s latest report and accounts, announced profits of more than 200Million Meticais ($3.13Million) from which it paid the Mozambican State, its shareholder, 60Million Meticais ($0.94Million) in dividends.

The Cahora Bassa Hydroelectric Board of Directors comprises Aida Magaia, Nilton Trindade, Hermínio Chiau and José Munice.

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