Retention of industry spend within Nigeria has quadrupled since indigenous E&P participation started
AUSTIN AVURU’S career trajectory as a renowned Geologist is termed by many as Exceptional. With about 39 years in the industry, and his consistency in championing full participation of indigenous E&P in the industry is commendable. Currently, he serves as the Chairman of Chappal Petroleum Development Company, an upstream industry player with special focus in revamping the Niger Delta brownfield opportunities. In this interview with OLUSOLA BELLO he speaks extensively on industry issues. Excerpt:
Twelve years in NNPC, with series of completed projects and a meritorious award for an outstanding performance in 1989, what were your most impactful projects in terms of revenue, industry impact and personal experience at NNPC?
I spent my first twelve years, Post-graduation, in NNPC. As you would imagine, those were my formative years in the oil and gas industry. My most comprehensive training experiences, the ones that ultimately prepared me for a very eventful 40-year career in the industry, all happened during those twelve years in NNPC.
The period was also operationally very active for NNPC. Between 1980 and 1986, we (the E & E Division of NNPC) drilled over twenty wells in the Eastern Offshore and Western Onshore. The Oredo Field, an onshore field that was discovered and appraised during the period has been on production for over twenty years. The three Leases that had all the discovered fields in the Eastern offshore were subsequently assigned to Mobil and Elf (now Exxonmobil and Total) where fields like Yoho, Awawa and Amenam/ Kpono were developed and have been on production. During the period, the Joint Venture Division (now NAPIM’S) was fully operationalized with the establishment of the core professional departments of exploration, Petroleum Engineering and Facilities and enabled full participation of NNPC personnel in operational activities. I was embedded in the field development teams in Shell (1985/86) and Chevron (1987/88). One of my most impactful experiences was in modelling all the technical inputs into the negotiations and final drafting of the 1991 Industry Memorandum of Understanding (MOU).
You have also been closely following the PIB. With the failing oil revenues, due to the impact of the pandemic on global oil demand, would you say that the PIB is needed more now than before?
Looking back now, I think the industry and the Nation are better served that the PIB will finally be passed into law at
this time. The current industry realities (Energy transition, the future of gas, realistic oil prices and domestic energy security) will be best addressed by the current draft PIB. The former drafts tended (very selfishly) to protect institutions and offices that were actually the hindrances to the optimal performance of the Industry. So, in a way, we are, actually lucky that we ended up waiting this long to have a PIB at the verge of becoming law.
You championed indigenous E&P participation in the industry, from your professional assessment, would you say that the local participation rate grew over the years? If yes, in what areas?
Professor Aminu initiated a deliberate policy of deepening indigenous participation in the Upstream Sector through his discretionary award of blocks to indigenous companies in 1990 – 1992. This, was then followed up by a series of actions by the NNPC, culminating in the Nigeria Content Act of 2010. Over this 30-year period, there has been a remarkable increase in participation of indigenous companies both in Oil and Gas production and provision of critical technical services. In fact, if we did not prepare the grounds for this local capacity enhancement, the country would have been grossly ill-prepared for the current spate of divestments, and withdrawals by IOC’S and some service providers. Retention of industry spend within Nigeria has quadrupled within this period. There is, however, still a lot of work to do in deepening local capacity to enable us to compete globally.
In November 2014, the London Stock Exchange Group and The Nigerian Stock Exchange signed an agreement to support African companies seeking dual listings in London and Lagos. Would you say that the championing the dual listing of Seplat Petroleum Development Company as the then MD/CEO propelled this agreement?
The dual listing of Seplat in Lagos and London in April 2014 achieved some huge,
but uncelebrated diplomatic mileage for our dear Country. In Preparing the prospectus, we had to create a bridge between the London Stock Exchange (LSE) and the Nigerian Stock Exchange (NSE) because the prospectus had to meet the requirements of both exchanges. We had to create a similar understanding between our own SEC and their UK counterpart, UKLA. Both had to approve the issuance. The strong relationship between the LSE and NSE today was actually a direct fall out of Seplat’s dual listing. This is something all of us Nigerians in Seplat are still very proud of to this day. You are currently the Chairman of Chappal Petroleum Development Company which is a new entrant in the industry, what unique and innovative solutions would the organization introduce in the industry?
I think a combination of my experience and reputation and the management’s drive and focus will produce what has been described as “a wellstructured, well governed ESG focused energy independent”. With your impeccable track record, industry players and stakeholders would have great expectations for the company. How do you propose to propel the organization to an enviable height?
Our industry today is in dire need of additional well structured and well run independents to fill in the yawning gap that the imminent fall-outs of the global energy transition and the maturity of our basin will create in our industry. Our intention is to create one of such world class, dependable independents. Who are the organization’s key targets and stakeholders in terms of clientele?
Our target is to access brown field opportunities of substantial scale and build a successful company and business around it. There are some on going discussions to this end. What are your future plans for the organisation?
We will throw everything we have into the first asset opportunity we get to rapidly build this Company into a sizeable Nigerian Independent of global repute.