6 October 2017

Nigeria: Okwuosa - This Is the Appropriate Time to Retool Nigeria's Critical Sectors

Photo: This Day
Barrels of oil.
interview

The Chairman, Oilserve Limited, Engr. Emeka Okwuosa, in this interview with Peace Obi, speaks on the private sector's role in Nigeria's economic recovery, his company's contribution to the country's oil and gas sector, among other issues

What hope can come from the private sector towards Nigeria's economic recovery?

What I can say is that government is in position to do better than what we see today. But again, let me point out clearly that the failure we see today is a foundational problem. It is not restricted to the current government. In fact, the current government inherited what I can call a mess according to the Americans.

For us to have gone through a regime of very high oil price averaging 100 Dollars per a barrel, which is unprecedented in the history of oil and gas industry in the world. And for five years and thereafter, we had the oil price dropping to the 20s, 30s and 40 Dollars per barrel and we are shouting that we have a problem, it shows that we were never prepared for it. What did we do with the entire money that came our way all these years? Why did we not deviate and build up agriculture? Every day we shout agriculture; agriculture cannot build up itself. Someone has to diligently set up a strategy that will drive agriculture over years like 20 to 30 years. You don't wake up and say in four years you will build up agricultural-based economy, it doesn't work that way. It involves investment and change of culture.

Now, coming back to the oil industry, oil industry for me is not the problem of Nigeria. The country's problem is beyond that. Whatever we call recession today has nothing to do with oil industry in my own opinion because in our GDP today, oil industry does not contribute more than 30 to 40 per cent of that.

The fact that we are down economically shows that we have not managed our affairs properly. Oil is an asset that is degrading everyday because you use it on a daily basis. If you are smart, you use whatever you get out of oil to develop other sectors of the economy. So, the bottom line is that the government system today still reflects what has been going on. My worry is that even the current government system has not really been where Nigerians expected them to be. Yes, we have difficulty, but difficulties bring innovation, innovation creates productivity, productivity grows a system. So, this is a very good opportunity for Nigeria to retool the way we think, the way we act, the way we live our lives. Like the National Chairman of APC mentioned, we have been wasting our time all these years living in squandermania. People live beyond their means; people try to do things the wrong way. You have to build before you can live in that building. Let us go back and know that the reality is there, agriculture and even oil industry have to be retooled to create values. And the value you create is from services, from the ownership of the oil assets but in the proper way, not ownership that is more like rent-seeking. If you have rent-seeking economy, you will never build capacity.

What is Oilserv's contribution in Nigeria's oil and gas sector like?

My contribution is diverse, but my biggest contribution is the contribution that I diligently decided to do. Let me give you a bit of my background. I left university many years ago, precisely in 1982 as an Electrical/Electronics Engineer and I went on to work for Schlumberger, the biggest oil service company in the world. I worked in 12 different countries of the world. I had the chance of remaining outside Nigeria, but I chose to come back to Nigeria in 1993 because I believe so much in Nigeria. At the height of the problems occasioned by June 12 issues of our late MKO Abiola. Nigeria was boiling, but I still left overseas and came back to Nigeria to set up my businesses. And what I did was to slowly set up Oilserv. From oil well logging to becoming the biggest oil and gas pipeline and facility, EPC company - Engineering, Procurement and Construction. And today, we build the largest gas pipelines in Nigeria.

As a private sector operator, how has Oilserv operations affected the lives of the common people of this country?

Oilserv is the company distributing gas all over Nigeria. When you have gas, you are able to build your industry, you are able also to power your systems, you have power; when you have power you can develop. Now, another thing we have done also is that we are in mining. We are employing a lot of people. Oilserv today has more than 500 direct employees and over 2,000 indirect employees. And then you have multitude of suppliers, sub-contractors. So, we are growing the families all around, providing jobs and affecting lives in different ways.

Also, we have developed a primary training that has been recognised by Nigerian universities which is what we call Graduate Training Programme. This is a situation where we take fresh graduates and make them productive. We take them and train them in key facets of oil and gas industry for one year, after which we give them certificates that would enable them become employable. And we graduate between 20 and 25 trainees every year. We also have skills acquisition system for the artisans, for the welders among others. The skills acquisition training also graduates about 30 trainees as well, every year. So, we build skills.

How would you assess the usefulness of the Local Content Act to Nigerians?

We, in Oilserv and not more than eight other oil companies started the setting up of local content in oil and gas industry in 1991 to 1992. That is what ended up being made into a law. We were there lobbying and pushed to have what we call the NOGIC Act of Nigeria Oil and Gas Industry Act. And what we have achieved is to nationalise a few activities and make it possible for Nigerians to be given opportunity to participate effectively and build capacity. That is exactly what I am doing now in countries where we are operating in outside Nigeria, like Uganda, Ghana, Benin Republic. What we have done in these places is to help them not go through the mistakes Nigeria made but also help them build capacity quickly. We are setting up a system in Uganda now that will enable the local industry to be able to grow very quickly in terms capacity, in terms of knowledge because the most important thing in oil gas industry is actually not that you are producing crude oil but the services that make you produce the oil. The services will make you employ people, develop skills and grow the economy of the country.

So, when is Oilserv starting full production in these other countries?

We have been there for the past two years and we have offices there and we are working there. In Benin Republic, for the past two years we have had ownership of Blocks One and Three offshore and we are developing those fields now.

What is your expected capacity?

Capacity is a question of opportunity. We are about to start building both an oil pipeline and an oil product pipeline over there. And we are also looking at building the gas pipeline that will interlink Uganda to Tanzania. But at the height of the project, we probably may be employing more than a thousand people.

What will be the impact of these investments on Africa?

The impact is to develop Africa. The impact is for us to understand that Africa has a very strong stake in the world and we shouldn't take ourselves as the backyard of the world and what it takes is to work hard, learn, develop and build local capacity.

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