‘Our rate of production as a country does not match our rate of depletion…in the last 8-10 years we have not added any significant discoveries to our oil and gas reserve, this is very worrisome’ – NAPE President
Nosa Omorodion, the president of National Association of Petroleum Explorationists, NAPE, is best described by those who know him as a passionate geoscientist, dogged, determine and a goal getter. His experiences in the oil and gas industry has been of immerse benefit to the association as well as the entire industry, a former secretary of the association which is the largest umbrella body of geoscientist. He is also the pioneer Secretary-General/Treasurer of the American Association of Petroleum Geologist, AAPG, which NAPE is an affiliate. He also represents the African region in the AAPG council. In this interview with Orient Energy Review, Omorodion bares his mind on his vision for NAPE and the Nigerian oil and gas industry.
Could you tell us what are your plans are for NAPE as its new president?
Basically my plan won’t be any different; it is to build on the gains that have been made and efforts of my predecessors. Is all about institutionalising professionalism and then using the reality and circumstances of today to equally see how we can position NAPE to continue, not just in relevance but to remain the premium in Africa oil and gas industry. We will continue to provide the platform and forums for cross pollination of ideas, we will continue to promote capacity building within the oil and gas sector, we will continue to draw meeting between governments to make sure we do not kill exploration. What this country has had in the last ten years is that our rate of production does not match our rate of depletion which is a major concern to me as a geologist, we are producing but we are not replacing it, in the last 8-10 years we have not added any significant discoveries to our oil and gas sector in Nigeria, that is very worrisome. The last major discoveries we had were the deep waters, the Abo, Gbonga and what have you, and we have been producing on average of 2.5 million barrels per day consistently year in year but we are not replacing them, it is worrisome because it will affect out GDP, our ability to borrow, and affects our stator as a major oil and gas producing nation. As a geologist I will tell you that despite the fact that we have been producing for close to 60 years, the Niger Delta is still under explored.
How is the Niger-Delta still under explored?
That means that we have not been doing much of exploration, there is still much to be explored in the Niger Delta, and then we are now equally discovering that there is huge gas reserves in the country, which is just the Niger-Delta. Then beyond the Niger-Delta we have other basins as well, the Anambra basins, the Chad basins which are equally under explored, every progress that has been made in the area of exploration is not by sheer planning but by coincidence, accidents or reactions. We started moving from land swamps as a result of community issues, we started encouraging indigenous companies and marginal producers because the big boys were getting tired of continuing to explore small fields and now we are moving towards divestment because the big boys are now very uncomfortable with the ‘un-encouraging’ fiscal regime in the country. So they will rather sell off their assets and move on, so there have never been concerted plans by government to say over a period of time that phase 1, 2, 3 has been explored. Peradventure these coincidence and accidents have been working out to the benefit of the industry but no government sits down and see things from that view. The truth is that in terms of exploration we can do more than we are doing, in terms of ability to encourage more fiscal terms we can do better than we are doing, and in terms of government’s intake from this sector it can be better than what we have today. That takes me to the next phase of funding; the industry is at an instalment today because of government’s inadequacy to meet major parts of its cash obligations due to JV. There have been several schools of thought, many have come out to advocate that it doesn’t make sense, it used to be 100 percent then down to 70 but now 60 percent, you hold 60 percent and you are unable to fund it while don’t you divest part of it. Then have huge sum of money that you can plough back to addressing some of the gaps in the local industries or come with a creative funding arrangement that will take into cognisance your fear of lost of control and address the fear of your partner’s financial independence.
How do some of these implementations impact on the gas master plan and how does it help with gas issues on ground?
The gas is relatively a new market, it is unfolding, and the recent policy of decentralisation has helped a lot. There are lots of gases out there and there are issues that should be addressed from infrastructures to making this gas available to the end consumers. Users need to come up with some form of monetisation scheme whereby you can make money from this gas, and the fact that you now have so many power generating plants out there that have the capacity, like I told you they want gas but they cannot access gas. Why can’t they access the gas? It is because there are no infrastructures to take the gas to them. One of the commendable outcomes of the recent restructuring of the NNPC is the creation of what is called the Nigerian Gas Marketing Company that will go out and source for this gas and help to market them, hopefully with this restructuring some of these will be addressed.
President Mohammed Buhari, during his speech at the CAPE VI congress, mentioned that oil exploration will soon resume in the Chad basin, what does this mean for NAPE?
Basically what it means is that it increases the prospect of us finding more hydrocarbons. For a long time the issue of the search for hydrocarbon in the north has been politicised. One thing you should know is that this industry should never be a game; it should not be because A is doing it then automatically B is going to do it. Before you go into any sector there have to be a very good market survey and analysis, in the past not much of that was in place but in the last few years NNPC through NAPE has committed a lot in doing a lot of studies, recording signs and the public folders are now with all these improved solutions to go out there and do more informative drilling. The whole idea is that we want to improve our hydrocarbon reserve base whether oil or gas, if you can get it then go for it.
Does it solve the issue of exploration funding?
It still has nothing to do with funding because this is 100 percent federal government venture and is FES, Frontier Exploration Services of NAPE. I guess that role has been transferred to RED (the Renewable Energy Division) I think it is a laudable idea, the point is that we need to take the politics out of it, we need to go there as oil finders and not to go there with the pre-notion that simply because there have been some production on the other floor of the Chad Basin then it has to be here as well, so you have to do some very thorough reservoir study to be able to specify if there was a fault in the gap comparing it with being able to establish and match the trough on the other side.
Is NAPE involved in this?
NAPE is not an exploration and drilling company, it is an association but NAPE members are involved. NAPE members cut across the entire oil and gas value chain. There are NAPE members that work in FES, my vice president is the general manager of FES, he is actually the one pioneering this effort. My treasurer is the deputy manager in FES as well, there are quite a number of members so we have members cut across.
NAPE celebrated 40 years last year, what has been the contribution of the association to the development of the oil and gas industry, the study of geosciences, and contributions towards framing policies in the industry?
It’s been 40 years where we have to look back and do some stock taking. It’s been a very eventful 40 years of contributing in no small measure to the growth and evolution of the oil and gas sector in the industry. NAPE membership cut across all cadres, the young geoscientists, the young school leaver undergraduates up to the Chief executives of the big oil and gas companies, we have had past ministers, past Group Managing Directors, a couple of the GEDs today, many GMs and MDs, virtually all the MDs of all the independents are all members of NAPE. By virtue of that it tells you that any resolution we make is bound to impart and be taken by members. But NAPE as an organisation in the last 40 years we have done a lot, not only have we played significant part in helping to promote ideas that find oil, we are actually oil finders, every oil finder in the country is a member of NAPE. We are working assiduously to bridge the gap, identify gaps between the industry and universities, and promoting them. We are working to fill the gap we have seen in the industry in terms of training, we bring this to their door steps, we organise training and capacity building programme both locally and abroad that everybody can have access to and even the IOCs benefits from it.
Over and above that we have learnt over the years that as successful oil finder/geoscientist you need to take a little bit steps and look beyond your technical strength. We have gone a little bit further in taking a look at the policies that affects our future and our profession. What do I mean by that? We provide platforms and we come up with communiqués which are marshalled upward for resolution and implementation and by virtue of having members cut across, we try to follow it to its fruition. We work with government in formulating policies, decrees and Acts that have affected this industry. We were the engine room that led to a number of game changing industry’s revolutionary Act like the marginal fields, the gas master plan; we have been playing key parts in all of these in encouraging discussions on pipeline vandalisation and how to address it.
In the last NAPE conference, we had complete one or two days dedicated to issues around funding, increasing hydrocarbon reserves in the country and there were discussants from all over putting heads together, those conversations are priceless and what we think we are doing this year is that i just commission an editorial team of NAPE members to work towards delivering what I call a business publication/Compendia that will become a reference and will talk about issues of funding to increasing reserve base, to hydrocarbon accounting and pipe line vandalisation – these issues that will never go away but keep on being reported every day. We are working on publishing a book that will be launched just before the NAPE conference this year. We want to leave our name in the sands of time.
We care about our members; we worry about the well-being of our members, for you to be a first class hydrocarbon finder you need to be healthy. This industry is going through a transition now, we have a work force that is aging rapidly, we have a workforce that is young and upcoming, and we have the middle, so the aging workforce as they retire from their comfort zones, they go back to their private zone. So we want to make available to these individuals some of the things they used to enjoy that make them first class hydrocarbon finders. In that regard, so NAPE will be working with 1 or 2 HMO providers to launch what we call NAPE insurance, and we are going to have various categories for allies’ professions like you journalists and other friends as well. What we are doing is to use our membership of over 7, 000 members to negotiate some very deep premiums, and is available to all, anybody can buy and have access to do the health care.
Besides keeping them healthy, how do you plan to replace the aging workforce?
It is through training, and continuous education programme.
How do you integrate the young ones who are trained into the industry?
NAPE cannot solve every problem, we can only do what we can to equip people to be able to compete, and we do provide platform for that every year. In June this year, NAPE will pioneer what we call student conference in this country, the first one was held around the year 2000 also in Federal University of Technology, Akure, after that we analysed it, you have attended our conference before, If you thought that was first class, then what we are trying to do is to replicate that as well for students. We have this conference organised for students, supported by the industry, delivered for students, if students come in there, we companies see what they exhibit, every company’s HR goes there to see what they will be exhibiting and look out for the best, students come there and they present and deliver papers, we encourage them, we have awards night where we give awards to the best student, we call it a mini conference, it is a 3 days event and this year it will be at the university of Ibadan.
Is this conference at Ibadan going to be the kick starter?
Ibadan conference is just an event, we do it every year, this year we do mini conference, the following year we do leadership summit which bring many university professors and those in the industry together to define what the issues are and try to see how you can bridge the gap. In also providing assistant on issues around their curriculum, how the university lecturers can become better trained, have access to the newest technology and use the forum to see which working assistant we can provide for them as well in terms of sponsoring the lecturers. So one of the things we are going to be providing as well is that by end of this year we would have identified one university in each geopolitical zone and we endow a cheque in each of those university. We cannot solve the problem of the world, we can only do the bit that we can and hopefully other society can take a clue from that.
Do you have plans to expand what you are doing further?
Expand it to where? We are doing that every year; one of the things we are doing this year is to revamp NAPE foundation which is supposed to be a funding dedicated to providing scholarship to identified Nigerians. We already have what we call a NAPE grant where we adopt students from universities and provide scholarships; we are just few individuals, so we would continue to encourage that. We will try and see how we can immortalise some individuals.
Is NAPE charting the course for the construction of modular refineries?
A major problem basically as a nation is that we need to get our refineries to work. It does not make sense that you are the giant of Africa, you produce oil and you don’t have the refining capacity. One of my most embarrassing moment as a Nigerian was a while back somewhere in the UK when I listened to a conversation to some ministers from some of those African countries saying that they were going to build a refinery and the target audience was Nigeria. It is a country I don’t want to mention, the country is not an oil producing country but we currently go to that country to refine, and that country saw the need to build a refinery and built some mega refineries targeting Nigeria, that speaks volumes. NNPC have refineries in every geopolitical zone, but they are not producing at their optimum capacity. People have come up with the idea that government should go away from the building of refineries, others have come to say refineries should be commercialised, however, the one that is indispensable is the fact that we need to improve on our refining capacity as a nation, so NAPE has been at the forefront of advocating the need to do this, so we have NAPE members actually the first company moving to own its refineries – Niger-Delta Petroleum Resources, they have their refinery, other companies are taking queue so we have been at the forefront in advocating for that. Modular refineries are some immediate initiatives to address the gap, if actually what i read in the press that Dangote is coming up with a mega refinery as well that will help address the refining capacity, then I think we are taking the right steps in the right direction.
Can you tell us more about AAPG and how it relates to NAPE?
It is the biggest umbrella body for geologist all over the world. It started several years ago and there are several international local bodies affiliated to it. The concept between AAPG, NAPE and SPE is that SPE have one identity all over the world, you have SPE everywhere in the world except for Angola and Canada. It is only in these two countries that you have AAPG locally. NAPE is a Nigerian need, it is a child of circumstances that was motivated by some senior colleagues that attended SPE meeting, but came back and saw the need to establish a platform where geoscientists can come together and cross pollinate ideas, discuss issues, technologies, policies that affects our practice and our profession. Like I said NAPE is affiliated to AAPG, it is a sister society, we walk hand in hand, we share same mutual goal and objectives that is to imbibe, instil, institutionalise, encourage, and promote professionalism, provide platform and avenue where we can discuss issues of common interest that affects the practice of our profession. And take interest in things around our environment and politics as well because we are beginning to learn fast that for you to be a successful geologist you need to be interested in decisions taken around you that affects your practice, well being, and your future.
Tell us about NAPE 2016 and what you plan to do differently this year? Then as Director of Independents in Schlumberger, what do you think our local content Act has achieved so far?
We promise to build on the gains of last year in this year’s conference, so this year we are looking at ‘the current realities in the oil and gas industry, today’s situation demand that you look at how you do stuff and if there is need for you to adjust. So that is the theme for this year. On the other side, my role was pioneer GM for Nigerian content for Slumberger company in West Africa so let me put your answer in one word, the nation cannot restitute for the so called negligence of the past 16 years in 1 or 2 years. The Nigerian Content Act is one of the laudable and one of the game- changing Act and best thing to happen in this country but the overzealousness with which the regulatory body try to go and enforce get really worrisome, there are quite some portion of the Nigerian content Acts that its interpretation needs to be tested, right now is Act the whips and caprices of its interpretation, so until it is tested to see the true interpretation we will continue to be in such situation. It is one of the good things to happen to the country, it has opened the doors for more Nigerians to come into the oil and gas industry. My only regret is that it has also opened a sense of entitlements for some Nigerians who think ‘it’s my right, everything should be mine’. What that means is that it has killed the zeal of some Nigerians to go out and compete; but am a proponent of the Nigerian content Act, we need it.