“Without natural capital accountability GDP growth is meaningless’
Stock photo of an offshore oil rig“Without natural capital accountability GDP growth is meaningless’

By Ediri Ejoh

The Oil Producers Trade Section (OPTS), a leading advocacy group for the Upstream Oil & Gas Industry in Nigeria, recently marked its 60 years of existence. In this interview, the Executive Director of OPTS, Mr. Bunmi Toyobo, a Shell Petroleum Development Company (SPDC) Executive on secondment to the group, speaks on its history and some of its achievements and challenges over the years.

Excerpts

Congratulations on the 60th anniversary of the OPTS. On reflection, do you think OPTS has met its founding objectives?

Definitely. OPTS has met its founding objectives of promoting the interest of members through defining and addressing non-competitive issues of common interest to members in order to ensure the continued viability of the Nigerian Oil & Gas industry.

OPTS also continues to provide a forum for advocacy in relation to government policies, laws and regulations that impact the industry.

What have been the challenges?

The Nigerian oil and gas industry has been challenged by a variety of issues that have hindered its value delivery to the country. The challenges of security and crude theft, as well as outstanding liabilities to joint venture partners, are two crucial issues.

Security and crude theft have been long-standing issues for decades that have denied the country and investors the benefits of the current high prices of crude oil. The theft has reached all-time highs, and is costing Nigeria millions of dollars per day in terms of lost government revenue.

Furthermore, the Nigerian government’s delay in making cash call payments is a significant challenge for oil and gas companies in joint venture relationships with NNPC. The liabilities owed by NNPC continue to pose a significant challenge to the industry’s operations and liquidity. As a result, it is critical that these liabilities are fully captured, transferred to NNPC Limited, and addressed as soon as possible. The settlement of these cash calls is critical for the industry to continue to invest and grow.

The OPTS currently has a total membership of 29 firms. As an industry Advocacy, would you say that is a fair representation of the players in the Nigerian Upstream sub-sector? If not, are there any challenges currently limiting your admittance of more members to the group?

There are currently over 50 oil and gas companies in Nigeria and so with 29 of these number in OPTS, I would say it is a fair representation especially considering the capacities of production, sizes and years of experience in Nigeria of the members. I believe it is a fairer and stronger representation.

However, OPTS continues to be open to receive new joiners based on the criteria set for membership.

What would you say has been the greatest achievement or achievements of the OPTS over the past 60 years?

As a body, we have collaborated with the oil and gas stakeholders in Nigeria to frame and shape policies and regulations like the Petroleum Industry Act (PIA) which is expected to redefine the Oil and Gas landscape. Furthermore, over the past three decades, the Oil and Gas industry has provided 90 percent of the foreign exchange earnings of Nigeria, as well as 40-60 percent of government revenue.

Our members continue to create new jobs while sustaining existing ones through new oil and gas projects. Over 600,000 direct and indirect jobs have been created.

Oil & Gas firms, especially in the upstream sector, usually flaunt their credentials in the area of Corporate Social Investment. In what ways has OPTS been a societal force for good in the area of CSI?

First, OPTS does not only clearly understand the need for CSI and engages in its provision, it also recognizes it as a strategic imperative. In the light of this, OPTS members have continued to contribute significantly to the good of the environment and the people among whom they operate. CSI contributions from our members include provision of boreholes, hospitals, health centres, mobile clinics, supply of drugs and medical equipment, support for agriculture, scholarships for undergraduates and graduate studies both within and outside the country, supply of ambulances and medicines to communities in the region, enlightenment campaigns against HIV/AIDS and communicable diseases and provision of educational facilities, among others.

What, in your assessment, are the most critical issues affecting OPTS member firms currently and what are you doing as an advocacy to tackle them?

The most critical issues are security challenges resulting in pipeline vandalism and crude theft; delays in cash calls from the government; a plethora of fees and charges; kidnapping of oil workers from time to time; overlap of functions by oil and gas regulatory bodies; and a long contracting period. These issues are resulting in high operating costs, an inability to attract more investment into the country, or parent companies of existing international companies refusing to continue operations in Nigeria.

To tackle these issues, we will continue to collaborate as an industry to reduce costs and work with relevant stakeholders to find solutions to the ongoing legacy and industry issues aforementioned.

People are often surprised to learn that OPTS is a member of the Lagos Chamber of Commerce & Industry (LCCI), given its seeming independence from the LCCI. What is your relationship with LCCI?

OPTS is a section of LCCI as required by law for all industry associations. OPTS has a very good relationship with LCCI and supports her projects from time to time. The ED, OPTS sits on the Board of LCCI and contributes to decision making from time to time.

How did OPTS mark its 60th anniversary”

The highlight of our 60th Anniversary celebration was a Celebration Dinner we held in Lagos recently which was attended by the Vice President, Prof. Yemi Osinbajo as Special Guest of Honour, other key Government functionaries, as well as the leading Executives in the Oil and Gas Industry.

The Keynote Address of the Vice President at the Event on Green Energy was a profound message on some of the major imperatives for the Oil and Gas industry currently and in the years ahead.

How do you see the future of the OPTS?

Very bright. I see OPTS continuing to wax stronger as an association standing on her founding principles and using the various platforms of advocacy that is in place.

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