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CAMAC targets listing on NYSE

Hector IGBIKIOWUBO
Abiola Lawal, Senior Vice President and Chief Strategy Officer for the CAMAC Group and Allied Energy PLC comes across as a seasoned professional who would rather allow his activities or that of his organisation speak for itself, and as such not freely given to publicity. But Sweetcrude got an opportunity to speak with him in the wake of speculations that the Oyo field might have been sold just few weeks after celebrating first oil.

Lawal’s activities are concentrated in the areas of Corporate Visioning, Strategic Planning, Mergers & Acquisitions, and Organization Design. Other areas of expertise include Post Merger Integration, Balanced Scorecard, Risk Management, Financial and Budget Planning, Quality Assurance, Value Realization and Technology Implementation.

He had served in various senior management positions at Oando PLC, SAP Business Consulting, eWorldtrack Mobile Technologies, Inc., Walt Disney Company and Ernst & Young LLP. He has an MBA from the Graduate School of Management, University of California, Irvine, USA focusing on Strategy & Finance and also possesses a B.Sc in Economics from the University of Ilorin, Nigeria. Mr. Lawal is a member of Institute of Directors of Nigeria (IOD). In this interview with Sweetcrude’s Yemie Adeoye he bares his mind on the activities of Allied Energy in Nigeria and abroad, as well as the controversies surrounding the deal on Oyo field.

Excerpts:
Please tell us a little bit of yourself and the company you represent?
My Name is Biola Lawal. I am the Executive Vice President and the Chief strategist for the Camac group. My responsibilities include every thing from planning to mergers and acquisitions, capital strategy and most basically growth strategy for the organisation and keeping track of where we are going.
Can you take us a little bit into the operations of your organisation. What specific areas of the oil and gas sector are you operating?

Camac group is in the oil and Gas sector, the energy sector basically, but there are three components of the business, the first is the first I think is the biggest platform of the business which is the Exploration and Production. The local entity we use is called Allied Energy. I am sure you are quite familiar with Allied Plc, so that is the first part of the business. The second part of the business is Camac trading.

This is the international arm of the business that does three things and one of them is trade in crude oil, one of the biggest off-takers of Nigerian crude. We also do trading in electricity in the United States as well as in natural gas. That is the trading business and the third part of the business is what we call engineering services, using this vehicle called Oceanic. Oceanic essentially is a local content vehicle for a lot of the Engineering efforts. In fact one of the core projects they worked on is the Oyo project.

We did a lot of work with some international vendors. On topside equipment, we are working with companies like Ted core, Shlumberger and other companies like that. Those are the three element of the business. E&P, trading, and engineering services.

Talking about the Oyo field what quickly comes to mind is the pact between your company Allied and some other companies, Nigerian Agip Oil Company, Pacific Asia and so on, even Oando. What is the ownership structure of the Oyo field, and what role is being played by these companies in the project, as well as any of your other business interests in Nigeria?

Allied Energy resources which is the original name of the company that was awarded the OPL 210 in 1995/96, discovered the first deep water discovery, actually out of West Africa, out of Oyo, that far ahead. That same asset is what led us straight into OML120 and 121. Over this ten years period, I think Allied has brought in several companies majors to help partner in developing the oil and gas sector in Nigeria I think the number is close to about 2Billion Dollars in investment over that time. More recently every thing from BP, Statoil, Conoco Philips at different time frame I’ve been proud of the development of this OML 120/121, but the exciting part is that Agip came on board few years back and the partnership was consummated and there was a final investment decisions that was made about two years /two and half years ago.

All hands where on deck to get Oyo field producing, to which it came on stream by late November last year. There were some celebrations in Abuja and I think it was well received in the market. The point to emphasise is that E&P is a highly capital intensive business, it takes long time gestation to explore, to develop and to produce before you actually get your first line of oil.

Its also technology intensive, so I think the smart thing to do always is to partner with the people that have the deep pocket and the capacity to really make a difference for your company and I think that’s what Allied has done with the ENI partnership. So, that’s basically the history of Oyo and Allied oil. Then Oyo field happens to be a little part of the 120/121 block, there is still a lot of potential exploration and development that would take place in those asset so, the important thing to say is that Allied is here to stay and Allied is increasing it’s focus and asset here and the Gulf of Guinea and it’s not in any way a shape or form of cutting and running, it’s not true particularly, I know there have been some questions regarding some of the transactions that we announced lately. So, I could spend sometime on that if you want me to.

The structure in the Oyo field has Eni as the operator, is that correct?
The way it works is this, Allied retains the operatorship of the field, ENI is suppose to be the technical operator of the field, there is a small distinction there, and the way we do that gives us advantage, one, maintaining the operatorship as a local indigenous company, we think that’s important to develop as a company. However, we also want to have the benefit of their experience, the expertise of a company as ENI with international companies that has thousands of wells drilled all over the world. So the structure of that contract or that partnership, then gives them the status of technical contractor which basically gives them technical operatorship, that is, the distinction.

My understanding is that if there is a technical operator, he is the person that runs the field on a daily basis… (cutting in).
For the most part its true, but we do it together, this is where the partnership is very important, we rely on their technical expertise, which like I said they do it on a daily basis across the world. And I think one has to be open to those kinds of synergies if we want to be able to develop. It is not a prideful thing. This is a business that is very capital intensive, technology driven and long term focus, you have to take advantage of that.

But the operator on record is Allied. But then the structure of the deal is to still have the benefit of the technical operatorship of ENI at this designation of the technical contractor and that is really what it is. But we work together. Our team and their team working together and that’s how we’re able to get to first oil in record time if I must be honest with you.

So if you speak so proudly about the Oyo field what is the -place of Pacific Asia in all of this, we understand they’re buying out?
Let me explain the structure because it’s very important to understand it. What Allied set out to do is to become a very successful Nigerian independent E&P company. But we want to be on the global space, we want Nigerians to be proud of this company in terms of what we could accomplish. If you remember, we started out last year, 2008 we tried to come to the market to do an IPO, we spent a whole lot of money in the process, but the market, not only Nigerian market, the global market really capitulated in terms of capital squeeze. So, we took a step further, we got approval from SEC, we got approval from NSE and we had a marching order. But the market basically folded, and it became an issue so we suspended that offer. It is very important to know that.

However if you are running a company, whenever there is an issue you don’t stop, you look up for another strategy and ask how am I going to fund the development of my company. So the deal with Pacific Asia, it’s very important people understand this is basically a merger where the Oyo field was put in that transaction, just like Pacific brought their assets into that transaction as well. I think they have some assets in China and all that. When those assets where combined together, it is very important to note that at the end of the day, Camac group will own the majority of that entity, and this is because we believe the Oyo asset brings more value into that portfolio.

And I think they obviously agree otherwise they would not do the deal. The important thing is that this deal with Pacific Asia provides us a platform on the American New York Stock exchange to be an independent global E&P company. And I think once we begin to establish that platform I think all Nigerians should be proud of it because if we can do it at that level, other companies will probably use that as an example to probably come to the States. In the United States that’s the first! I know there are more in London and other parts of Europe but in the United State for example, in terms of a Nigerian E&P company that will have a platform at that level. The other thing to note is that when the deal is finished Pacific Asia’s name will be changed to Camac Energy. Again, that tells you that Oyo is not being sold as being speculated, that’s just incorrect, it’s basically a merger, a combination and at the end of the day you take a majority of 67 percent which is very significant.

Like I said, Oyo field is just a small part of our asset, OML120/121 and it’s what is being used for the transaction. We have a lot of growth platform, we have a lot of strategies to continue to develop and expand our footprints in the Nigerian E&P space. We have interest in the member of other assets with our other partners locally.

OML 282,278 and like we said the 120/121 of which Oyo is in the 120 block itself. So to us, this is using what we have to try to expand the platform and create the platform where investors can see this, a Nigerian driven, E&P company on a world stage in the New York Stock Exchange and use that as a means to develop even more in the future.

So its something I think we should all be very proud of, and we believe that when the time is right, with what we set out to do initially which was the IPO in the Nigerian Stock Exchange we think that perhaps that opportunity will occur again for us to do a dual listing here. It is a capital strategy but does not in any way invalidate our course to continue to develop our assets in the Nigerian oil and gas we support it, and we think the independent indigenous oil and gas companies needs to be given an opportunities here.

For the records are you saying specifically that the Oyo field is not being sold to Pacific Asia?


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