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•Seplat Petroleum boss speaks oil and gas business, what they offer host communities

It is not very clear if many Nigerians know that the Chairman and Founder of Seplat Petroleum Development Company PLC, Dr. Ambrose Bryant Chukwueloka Orjiako, is a trained Orthopaedic and Trauma Surgeon.

This Anambra State born surgeon has veered into the oil and gas industry. In this interview with our man, Chidi Nkwopara, Dr. Orjiako explains what he has done differently in the oil industry, the prospects of the nation’s oil and gas industry and more. Excerpt:

What has Seplat Petroleum Development Company done differently, since venturing into the nation’s oil and gas industry?

I think that one of the landmark things that Seplat did, is that we basically disrupted the status quo in the upstream oil and gas by starting indigenous programme and taking it to a different level. That was when we pioneered acquisition of oil assets from international oil companies. We took over in 2010, assets in the Western Niger Delta.

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Today, I am happy to say that we are operating five oil assets, both in the Eastern and Western Niger Delta. Since inception, part of the things we have done, has been to grow our production, grow our reserves and basically place the Company in the international arena.

Does this make Seplat unique?

Well, we are a Nigerian Company but we operate based on international standards. You are probably aware that we are the only Nigerian company in the extractive industry that is listed both in the London Stock Exchange and the Nigerian Stock Exchange. And it is not just listing in the London Stock Exchange, we are listed on the main board, if you understand the difference. There is a main board and also a subsidiary board. Today, we are premium listing in Nigeria.

But that is not just all. The Company, since inception, has remained very   cash generative, growing revenue and profit year on year, paying dividends to our shareholders. But I think what is even more inpactful is what we have done to the other stakeholders.

Can you name them?

Yes, I can tell you what we have done. At the national level, we have contributed over $1 billion that accrued to the Federal Government from royalties and taxes. That is quite phenomenal. We also have continuously impacted other stakeholders, which includes the state and local governments and communities, where we operate. We make them to believe that they have a stake in our business. So, that is why the businesses we do does not just stop from generating revenue, making profit and paying dividends to our shareholders.

What are the positive things you have done in the host communities?

They are many and varied but I think the most impactful things we do, are the things we do in the communities where we operate.

In the communities where we operate, we develop what we call the Seplat Model of Community Engagement. It is not that any other company cannot do community engagement, but we basically change the narrative. We decided that it is not just enough to pump money into the area, but we decided to empower the people from the communities where we operate.

So, what you find is that we get there, we train the youths, particularly on how to become skillful in the oil business, so that they would contribute to what we are doing.

We have stopped where we give jobless people money. We train the youths and give jobs to those who want to work. For those who want to be part of what we are doing at a higher level, we coach them and teach them entrepreneurship and make them contractors in areas where we work.

So, if you go to areas where we operate, you find local contractors who we have actually held their hands and taught them the business and they are all doing very well. So, in effect, we have created empowerment and prosperity in every where we work. This has brought a lot of confidence between us and the local communities.

Now, over and above that we have continuously impacted the communities through our corporate social responsibility programmes. The cardinal things we do are education, where we give quite a lot of scholarships and create quite a lot of education and social activities among children of school age.

We have focused on scholarship at university level. I believe that we should train engineers from these areas.

We have also focused in health. And in health, there are two cardinal things we do. One is to target maternal and child health through the safe motherhood programme we have done, where several thousands of women in areas where we operate, have received free anti-natal and post-natal care.

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Another flagship project we have done is the Eye-Can-See programme, where we have treated more than 50,000 eye patients across areas where we operate, and even beyond.

What specifically, are you doing in Imo State?

It is not just by chance that we decided to operate in Imo State. It is because there is an asset that was being run by an international oil company, Chevron. We then filed a bid for it with other companies and we won.

But having won, we then decided that we would not operate that field as if we were another international company. I am from the South East and it is for me, one of the catchment areas as well.

Therefore, as a Nigerian, we decided to impact the Imo communities where we operate, in the same way we have operated everywhere else.

So, what you will be seeing is that we are going to bring in quite a lot of social developments in these communities. You are going to see youths and women empowerment in these areas.

Can this be all you have for Imo people?

Not actually. Only recently, one of the biggest gas projects in this country, is going to be sited in Imo State. It is called the Asaa North and Ohaji Gas Project.

This gas project is going to attract about $700 million in investment, and this is a joint incorporated venture between our Company, Seplat and the National Oil Company.

That is on our side. On the Shell side, they will also replicate another $300 million in investment. So, in Imo State,you will be having attraction of almost $2 billion in just gas alone! That is quite phenomenal.

What we will then do is to make sure that the real multiplier effect, in terms of job creation, creation of business opportunities and environmental positive impact, will be felt in Imo State. I can go on and on, but it is quite a huge thing to happen. You are going to be seeing quite a lot of our contributions as a private sector company in that regard.

With all these beautiful things you said, why do we still have all manner of restiveness in oil communities?

Well, you know that in everything, there is always room for improvement. Nobody can say that everything is perfect. But the communities should contribute to make sure that there is no useless youths restiveness.

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I am clear in my mind that communities where oil and gas is produced, have a genuine aspiration to be part of the entire business of oil and gas. And it is a genuine thing everyone should identify with.

But there is also some element of criminality in the restiveness. So, we need to separate them. When there is a genuine aspiration to be part of what we are doing, we embrace it and we roll out what we call the Global Memorandum of Understanding with the communities.

And what this entails is to map out all the social and economic development for that community, set up a committee that is by both ourselves and members of the community. But we put in all the money. We do need assessment to identify projects that they require, like water, school, roads and the rest of them, and we provide them. We also create employment. In so doing, we make sure that we buy their confidence in a very transparent manner and we stamp out restiveness.

Is it that simple?

Let me explain this a bit. When we started in the Western Niger Delta, we decided to keep record of all the vandalism in the immediate areas where we operate.

Before we started and for more than one or two years, Shell could not work in this environment. When we went and engaged the communities, we started. Obviously, before they realized what we were bringing, there was still vandalism.

So, the very first year, there were 11 cases. This was in 2010. It went down to four in 2011. In 2012, we had two cases of vandalism and by 2013, we had zero! And till today, all the assets within our purview have no single incident of vandalism! I think it is important to say that it is because we engaged the communities. We are going to replicate the same thing in Imo State.

We have just started in Imo State, and there are slight skirmishes here and there, but by the time we continue and get our foothold in the place, you will see that it will become a thing of the past, and that is coming very shortly.

It has been touted that oil may not last forever. What should be the nation’s safeguards?

In fact, there is no business that does not have continuous changes as time goes on. What has happened in the oil business is that with the advancement of technology, with the discovery of oil in various parts of the world and Africa as well, and with the advent of clean energy, there has been speculation that oil business will become a thing of the past

Frankly, what we have seen is that all of these have impacted oil price. And this is to say that oil price is no longer beyond $100 per barrel, but it will remain a credible and lucrative business for quite a long time to come.

Having said that and as a Company, we provide ourselves and we have the safeguards to address this. Number one, is being a low cost operator so that even if oil goes as low as $40 and below, per barrel, we will still continue to be profitable and comfortable.

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What about the time value chain of oil and gas?

Honestly, we are looking at the time value chain of oil and gas business and that is why we are focusing on our gas business. That is actually a cleaner form of energy and if you are operating in the Nigerian environment, where you have a huge gap in power infrastructure, you will agree with me that gas will continue to play a major role for a very long time to come.

Today, we are providing 30 percent of gas to power in the Nigerian domestic market and there is still huge opportunity for that development to happen that will take several years. We still have gas to agriculture. We still have gas to industry.

All of these by themselves, will constitute what the government has been talking about to diversify the economy away from oil. Obviously, so many things have been said about oil price and oil being a commodity that would be extinct, but I am very sure that the time is not now and it is going to be so many years to come.

What is your take on gas flaring?

Obviously, gas flaring is something that destroys the environment. Really today, it is like burning petro- dollar. There is really no reason any molecule of gas that is being flared should not be converted to useful energy, to save the environment and to provide energy for usage, both in domestic homes and for industries. Frankly, it should become a thing of the past.

I think government has done the right thing by imposing penalties for gas flaring and I believe that companies should key into the government policy, like what we are doing., and make sure they invest in gas commercialization to reduce gas flaring.

Can you guess when gas flaring will stop in Nigeria?

Honestly, Nigeria has been putting a lot of time-lines to this, but from our perspective as a company, we would like to take out gas flaring ahead of that timeline given by the government. Frankly, I am not going to give you a particular date when it could be off in the entire country, but obviously, both the private sector investors and government are focusing on this and making sure that the goal is achieved.

Vanguard

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