‘2023 Transition Will be Pivotal for a Better Nigeria’
On the spot they hired me as Corporate Counsel to manage all their mergers, acquisitions and divestitures across the world. It was a massive role, covering about 120 countries. I was 33 years old, and I stepped into the industry just as the global economy was about to enter a massive growth phase powered heavily by the energy from oil.
Very interesting, so you came into the industry as a Lawyer, how did you then end up in operational råoles that are typically occupied by Engineers and Geologists?
Yes, I started in the legal department, but I very quickly began to pine for an operational role, and many of the operational guys I worked with liked my approach to solving legal problems. You see, many Lawyers are skilled at identifying and highlighting impediments to operations. I had a different mindset. I believed my role expended beyond the identification of legal issues; I felt it incumbent upon me, to provide solutions and fixes to business problems. Turns out business managers and operations people really appreciate that mindset, in an in-house Lawyer. So, based on feedback to my bosses and other factors, I very quickly got promoted to General Counsel and Company Secretary of one of the major subsidiaries of Schlumberger. That was in 2002, and that prompted my relocation from New York to San Jose, slam bam in the centre of Silicon Valley in California.
That promotion was a transformational move for me in many ways, and barely two years later, that subsidiary was spun off as a separate company in an equity carve out. The successor company was subsequently listed on the NASDAQ, and eventually acquired by a competitor for $660 million. I received a significant deal completion bonus, and was ready to cash out and move on. My intention was to return to Nigeria, to start my own business. Then something curious happened. The Director of Human Resources in Schlumberger, refused to accept my resignation. Matter of fact, he flew from France to the US to see me, to make the case that I should consider an operational role in Nigeria to support the country operation there. The package he put on the table was compelling. Because I’d been recruited in the US, I was categorised as an international hire, and he offered me an expatriate relocation and compensation package to move to Nigeria. The sweetener he added, was that if I wasn’t happy with the role I could leave after six months. Needless to say, I took the offer, my wife and I bundled our 2 young kids and we moved to Nigeria. That’s how I ended up in Lagos as the Executive Director (Oilfield Services) of Schlumberger Nigeria, with full expatriate perks in a senior operational role.
So, how did you end up at NNPC? Were you headhunted from Schlumberger?
No, I didn’t come to NNPC directly from Schlumberger. I came to NNPC in August of 2015, as part of an outside team that was recruited into NNPC by the then GMD and later Minister of State for Petroleum, Dr Ibe Kachikwu. I’d known him previously on a personal level and he’s a super smart man whom I’d always looked up to, so the prospect of working with him to turn around NNPC was quite exciting. I was his very first hire, and I came to join his team from the US where I was a Partner in a private equity firm in Atlanta.
Understood. So, was it difficult making another transition back to Nigeria and into NNPC?
I always characterise my relationship with Nigeria. as akin to a relationship with a bad but irresistible lover. Like when I’m away from Nigeria, I miss the vibe and the energy of the country; but, when I come back home, I am very quickly reminded of why I left in the first place! For me, transitioning in and out of Nigeria is not really a hassle. It was tougher when my sons were younger, because relocation meant we had to worry about moving them to new schools, worry about the cultural shift and the
transition shock to them and all that stuff. By the time I came back to Nigeria in 2015 to do my NNPC tour of duty, my sons were teenagers and had zero interest in coming to Nigeria. I think they’d already figured out that their father was a restless and adventurous soul, and wanted no part of my constant movement. So, I pretty much came alone with my suitcases and settled into my first role as Managing Director of IDSL which is the for-profit seismic subsidiary of NNPC. My immediate boss was Dr Maikanti Baru of blessed memory, who at the time was the Group Executive Director of the Exploration and Production Directorate. With the support of Dr Kachikwu who was GMD as well as Dr Baru, my IDSL management team and I were able to turn the fortunes of IDSL from a loss making venture into a profitable multi- billion Naira venture before I left for a new position two years later.
That’s quite fascinating. You also served as the Group General Manager (GGM) of NNPC’s National Petroleum Investments Management Services (NAPIMS) before you were promoted to Chief Operating Officer. What exactly did that role entail?
NAPIMS is the heart of the entire Nigerian oil industry. Think of it as the domicile of all our oil and gas assets, as a country. It’s that simple. All of Nigeria’s joint venture and production sharing contractual interests in the multinational and indigenous companies, are managed by NAPIMS on behalf of the Federation. Everything to do with exploration and production, including the management of our cash call obligations, falls under NAPIMS. So, you can imagine the ripple effect when I was appointed as the GGM NAPIMS. I believe I was the first non-Engineer or Geoscientist, ever appointed to the superintend over the work program and budget of Nigeria’s oil industry. The learning curve was steep, but my team and I engaged our industry partners and players, and we had an amazing run with two straight years of surpluses in trillions of Naira delivered to the treasury. It might interest you to know that, the two subsequent appointees to the GGM NAPIMS position after me have also been non-Engineers and non-Geoscientists. We broke the glass ceiling there, if you ask me.
You resigned in July 2020 as a Chief Operating Officer of NNPC. In Nigeria, its very unusual to find people resigning like you did. What informed such a decision?
Ikepo, in July 2020 the world was in the grip of a vicious pandemic. There really was a global lockdown and restriction of movement, except in narrow humanitarian circumstances. I was in Nigeria, away from my family. You recall people were dying, and folks had to hold zoom funerals for loved ones. That was the horrifying spectre that prevailed, and I really was terrified. I have to confess. I had anxiety and panic attacks about my family, and whether they’d ever see me alive again. In this frame of mind, I decided I had to pack it all up and return to my family and that’s what I did. I consulted with my boss and big brother, the GMD, Mele Kyari, and he understood fully where I was coming from. He was so compassionate, and kindly suggested that I should go to Atlanta and work remotely from there. Now, remember no one had any idea about how long the pandemic would last or how soon the vaccine would come, and I felt it would be unfair for me to be away from the rest of the management team indefinitely. It would have been convenient for a few weeks, but the difference in time zones and other handicaps would have made it untenable for such an arrangement to work in perpetuity. So, he kindly presented my resignation to Mr President, who very graciously accepted. The same day I jumped on a humanitarian evacuation flight, and exited stage and left.
So, let us ask you a broad policy question: why are the oil majors divesting and leaving Nigeria? Is there anything about our regulatory or operational environment that makes them reluctant to stay?
Nigeria is a tough place to live, for the ordinary citizen. It is a tougher place to do business and thrive, irrespective of the business in question. It’s tough to run a law firm, it’s tough to run a bank and it’s super tough to run a complex business involving exploration and production of oil and gas. That’s the truth, and we have to accept it.
Historically, the oil majors have been able to manage the tough business environment in Nigeria, because of the allure of the richness of the hydrocarbon resource base in Nigeria. We have abundant reserves of high grade and in demand hydrocarbons. Sadly, that equation is fast changing. There’s rich oil and gas deposits in all corners of the world. Here in Africa, there’s oil in Ghana, Mauritania, Angola, Mozambique, Kenya, Uganda and I could go on and on. Bottom line, Nigeria is no longer the only spot with hydrocarbon deposits. The oil majors now have multiple options, and in deciding where to deploy or retain their investment dollars, they focus on cost of operations. In oil and gas, we measure everything from the perspective of cost. What’s the Unit Technical Cost per barrel? What’s the complexion of operating expenses and capital expenses? It is the answers to these questions, that drive the investment decision. The cost profile in Nigeria has been escalating aggressively, for almost 30 years. If you ask me, I would say the agitation in the Nigeria Delta laid the seeds for cost escalation. People of the region complained rightly about neglect, exploitation and despoliation of the region, and rather than engage intelligently with the indigenes of the Niger Delta, the then military government responded with a militarisation thesis. It didn’t work, and it only led to more agitation and outright hostility to the oil producing companies. They in turn, responded by increasing their security budgets. By the time I arrived Nigeria as Executive Director of Schlumberger our security expense was the second highest line item in our variable cost budget. Totally ridiculous state of affairs. That was 20 years ago. I hesitate to imagine what the costs are today. If you have to run an oil operation in an environment where your host community youth kidnap your expatriate staff, vandalise your pipelines and consistently sabotage your operations, you would have a hard time justifying to your shareholders why you need to remain in that environment when there are other countries happy to welcome you and your investment. You’ve got to realise that the investment dollar only goes to where it is welcome.
Now that you have brought this conversation to host community issues with oil companies, why is it easier to sue these oil majors overseas in their home countries for breaches that occur in Nigeria? Doesn’t that state of affairs deprive Nigerian Lawyers of the work and fee income?
“If you have to run an oil operation in an environment where your host community youth kidnap your expatriate staff, vandalise your pipelines and consistently sabotage your operations, you would have a hard time justifying to your shareholders why you need to remain in that environment, when there are other countries happy to welcome you and your investment.You’ve got to realise that, the investment dollar only goes to where it is welcome”
I like how you keep dragging me back to my roots as a Lawyer. You see, a Plaintiff who suffers injury wants justice and compensation. I’m not sure they care about the venue where the justice is delivered. That’s just plain human nature. I think the real question here has to be couched differently, in other words, why is it so hard to get justice in Nigeria? I believe that is the real question. If an Ogoni man could get a judgement against Shell for example from a