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Nigeria highly unexplored in terms of oil and gas - Lekoil CEO

Friday, 17 February 2012 | 00:00
Nigeria is still highly under-explored in terms of oil and gas. That was the view of Lekan Akinyanmi, the chief executive officer of Lekoil, during his interaction with BusinessDay recently.
The Lekoil boss spoke on the propensity of crude oil in the country given the fact that most of the exploration activities in deep water have largely been unsuccessful. He said the country had been very fortunate, in the sense that it do not only have a lot of crude, but has a lot of light sweet crude.
“We haven’t really had to do much in terms of enhanced oil recovery in Nigeria and there are some areas where we think that if you bring new technology to bear, there’s a lot that can be done. You get such a fantastic return from what is already in place that sometimes people don’t push too hard on the exploration side. But there’s a lot of room for exploration in Nigeria,” Akinyanmi said.
Speaking on the Petroleum Industry Bill (PIB), he said the concept was very attractive from our perspective, because his company keyed into the idea that indigenous companies should be allowed to grow, to flourish and to attract capital. According to him, over the decades, majors and large service companies have done fantastic jobs in terms of training Nigerians, adding that there is no sector or sub sector in the oil industry where there are no Nigerians that are experts in doing their jobs and to the extent they can be reorganised when they put themselves together to form indigenous companies.
“We should form and develop indigenous companies that are as strong as the major oil companies from a technical perspective; then our advantage will be our local knowledge. So, that’s one concept of the PIB I am very excited about,” he stated.
He, however, said the process was taking much longer, but that when it is viewed from a historical context or from a very long term perspective, the PIB is quite a big change and so “we shouldn’t be too surprised because there’s a lot of back and forth movements involved.”
He observed that indigenous operators in the oil and gas industry have enormous work to do to become big as the environment is very challenging. “It’s like what we say internally that if it was easy, everybody will be doing it. It’s not easy. It is tough. But we also believe that the returns that you will get are more than worth the trouble. So, we want to go in there. And also in terms of coming into the industry, hopefully, as we are building this entity, Lekoil; as we have more and more indigenous companies, if we build professional entities, then we actually have an opportunity to refine the part we don’t like in the system,” he said.
Also speaking on the issue of marginal fields, he noted that operators have one big challenge which is access to capital which is strange because oil is a global commodity.
“The process is well understood in terms of what you need to do to develop a field and so on. But having said that, there are legal and financial structures sometimes that you have to put in place that makes it easy - some things you have to put in place to make it easier for you to attract capital; so it’s more than just the access, it’s also the risk and how you manage it,” he further explained.
As regards community related issues he has this to say: “I think there has to be a partnership because there are underlying issues that have to be resolved. We have communities that have produced incredible amounts of wealth, but when you visit, the standard of living is not up to par. That’s one part of the issue”
“Over the years,” he stated, “there have been some mistrust among the parties because there have been experiences that are not as positive with some of the oil companies.
But from the perspectives of the oil companies, they should work. They have allocated a budget and they believe they are getting things done. Many of them also think it is the responsibility of government. So, there’s been a lot of disconnect. Everybody thinks they are doing the right thing but we are not getting the results.”
Source: Business Day Online
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