By Yange Ikyaa
Tunde Olaniyan is the Director of Business Development at Petrolog, one of Nigeria’s earliest indigenous oil servicing companies, with over 40 years experience in operation. He recently shared with Valuechain’s YANGE IKYAA, the story of his company’s great achievements over the years, working and delivering on projects across Africa and in other continents, such as South America and North America. Excerpts:
Talking about your services, what exactly do you specialize in?
We started as a logging company, as you can see the name Petrolog, mud logging, and from there, we started doing manpower procurement and management services; we source for staff for international oil companies (IOCs), then we metamorphosed into supply of rigs, wells capillary services; we drilled Usan, Owowo, and we did shallow drilling; we drilled Ofon Phase 2 for Total, and from there, we moved into marine services. We own DSV Vinnice 100 per cent; it is a saturation high air diving vessel, 180-man accommodation, 100-tonne crane and we do a lot of lifting and diving services. We also have a sister company, Global Ocean; they are into engineering, all underwater architectural engineering design, they do that, so we are doing very well in the industry as a conglomerate. Presently, we are in Angola doing geotechnical-geophysical for Chevron, so we have Petrolog Angola. We are in Houston too, we have an office in Houston in the United States, we have done a lot of drilling activities in Venezuela in the past. At a point, we had about 15 rigs drilling at the same time in Venezuela, so we have done quite well and we still see opportunities in the industry.
Is it an indigenous Nigerian company, with all these kind of exploits?
Absolutely! We’ve been in the industry for over 40 years. Petrolog is one of the first indigenous oil servicing companies in Nigeria and it is also a pioneer member of PETAN, the organizers of this event. We are also a member of OGTAN, we belong to so many associations and we still believe there are so many opportunities.
It is so impressive to hear about this when a lot of people complain that African nations do not trade or render services among themselves. It is heartwarming to know that you are in Angola. Now considering the fact that the African Continental Free Trade Agreement has been signed, what is your outlook on this new possibility, going forward?
Yeah, it’s a good development. In fact, we are always ahead of others; we have Petrolog Sierra Leone, I registered it in 2012/2013, and we are also in Guinea; we took hydrodynamic to Guinea to run some drilling activities. We were in Ghana when Ghana started but we realized that the local content framework does not permit foreigners to participate easily, their framework for local content is different from the way we put it in Nigeria, where we allow foreigners to partner but their own is so stringent that it was difficult for us, and we realized that the capacity is not much there and the volume, their reserve, is not big enough.
But we see opportunity in all this; we are prospecting in Gabon, in Mozambique, and Angola. We have an office in Angola presently, and we have some Angolans on our board and we have some of our Nigerian staff working there. This guy just returned from Angola (pointing to a colleague), he was working in Angola as a project manager for Chevron on the operation we are doing there for them. So, we see opportunity; African trade is real, we are brothers and we can leverage on whatever experiences that we have, Africa for Africa.
How do you look at the readiness of the industry to tackle the challenges posed to it by COVID-19?
You can see that people are really ready to get back to work. Yesterday, I was looking at the oil prices still trading at over $100 per barrel, so I think that there is a lot of opportunity and we need to go back to work, and with the turnout now, I believe that the next one will even be better than this. That is what I see; I see prospects, I see new things happening in the oil and gas industry because for the past two, three years, COVID impacted the industry but I think that things will get improved. Also, with the crude price now in the positive due to the problem we have in Russia and Ukraine, I think we should even take the opportunity to invest and be focused and in the long run, we will create more employment, as a lot of people are out of job due to COVID, but with what is going to happen in the next couple of weeks, months, I think there will be a lot of investment in oil and gas and everybody will benefit from it. So, that is what I see.
The PIA is what a lot of operators like you have always said you were waiting for; what difference does it make to you particularly based on your projects and prospects?
You know, we don’t know the policy direction for these IOCs. You know, the interpretation of the PIA is not yet well done and everybody is still studying it. Let me say PIA is late, probably too late, maybe 10 years back, we could have done that and everybody would have positioned themselves in terms of investment commitments. Now, companies like ExxonMobil, many of these our clients are divesting from Nigeria to Ghana and elsewhere, it’s too late. Before they made discovery in those areas, moving their funds away from Nigeria, we could have passed this Bill long ago and that would have given everybody the opportunity to say this is what I want to do. But it is too late now, so everybody is still very skeptical. Where do we go now? You can imagine what could have been, with oil now selling at over $100 per barrel and things are still like this; no drilling activities, no exploration activities, it’s like we are just taking from the old layers and we are not in new chicks.
But there was this issue of marginal fields that were recently auctioned?
Yeah, for the marginal fields that have recently been auctioned, the mistake there is that they are a marriage of inconvenience where you merge people that have no knowledge of one another, they really don’t know each other. Like you now, somebody bringing you to me and saying this is my friend and we should just do business. Can two just work together? Except they agree, they cannot.
The merger of 10 people in a bloc and they don’t know one another or each other is unfortunate. At least, business parties have to know the antecedents of one another, what each party has done in the past, experience, areas of comparative advantage, and then agree on how much each party can contribute to the investment. Different questions have to be answered; how much are you going to bring, how much am I going to bring, how are we going to develop? Without this these marginal fields are not going to be developed, and even those that are producing, the production will reduce because it’s not just about signature bonus. What happens after? It’s like marrying a woman, at the day of wedding, it is all I love you, I love you, but after the wedding, the question emerges, where is the food? So that is what I see in that, and a lot of people could not even pay for the signature bonus and that is a lot of problem. If the government had looked at it and reasoned that can A and B work together, what are you bringing to the table, what am I bringing to the table? Then, we will see that we can collaborate and work together. There is nothing wrong in forming an alliance, that is the best thing to happen to people, but when they cannot agree, you see in-fighting and government will and at the end of the day, the production level will drop because the one that is producing now, when we are fighting, maybe we are producing 10,000 barrels per day and we cannot meet up, what happens to the contribution to national and global production? Other people will certainly go ahead of us and we cannot take the benefit of the increase in price, and that is exactly what is happening to us. At a point we were producing 2.7 million barrels, but it has reduced.
Finally, what can you say is your own take on what the government should have done differently in this regard, any policy advice?
What the government should have done is putting a round peg in a round hole. You know, politicians at the helm of affairs of the oil and gas industry, all they care about is what do we give to the party members? You have to put professionals if you want to increase reserves; you have to say I want to punch hole, I want to drill well, I want to make more discovery, and it is a professional that can do that; an explorationist would want to do that, a geologist would want to know what our volume is now, the number of barrels that we can discover. But when you put a politician there, he may not know much about it, he may not know about the number of liters needed because all he may care about is how do we finance this budget? They don’t think much about tomorrow, you know; so that is my take about it, put a round peg in round hole, squared peg in squared hole and you will see that everything will change for the better.