Indigenous Oil firm, Oando PLC, was founded with the sole aim of becoming one of the best in terms of Oil exploration, production, trading and distribution, with branches across the country. Obviously, this aim has been achieved and the company has a success story to its credit, as one of the local Oil Companies in the country that transformed from the downstream, where it commenced business, to the upstream sector in the country’s Oil industry.
Although the transformation was not easy to come by due to forces beyond its control, hence it struggles to survive and remain afloat in the Oil industry. Oando can be regarded as a cat with nine lives, owing to its numerous challenges, that would have made it bid farewell to the industry and be consigned to history.
Disclosing some of the challenges that Oando passed through in the course of discharging its duties in the Oil industry, Head, Corporate Communications and CSR of the company, Alero Balogun, made it known recently at the Energy Sustainability Conference held in Lagos, with participants across the energy value chain, that Conoco Philip’s asset was acquired in 2014. During this period, Oil price was over $100 per barrel and it took 18 months before the company could get ministerial consent. This was never anticipated. The delay caused additional $15 million, by the time it completed the transaction, it had paid $450 million. Oando took $800 million as debt to finance the asset, while the deal was closed, in July 2015, and the price of Oil had fallen to $60 per barrel. By December 2015, oil price had fallen to $35 per barrel.
Balogun opined that after the investment had been made in 2015, militant attacks on Oil pipelines increased and the risk was severe. On the other hand, there were lots of flooding that led to shutting down of pipelines, and the reduction of production.
However, Oando bought the asset when the company was producing 5000 barrels per day and had about 18 to 19 million barrels in two 2P reserves. At the conclusion of the transaction, it increased production to over 50,000 barrels per day and the 2P reserves had gone up to 240 million. “This was also at a time when the country went into recession with tight price of oil and fallen oil price had global effect.”
The Oando publicist submitted that it was a challenge for the company that is capable of taking it out from business hence it took major decisions to resolve issues bothering it. “As an integrated energy player, it divested from its naira earning businesses and focused on dollar dominated ones”. The midstream and downstream businesses were divested.
Also, the company got respite from international companies such as Vitol, a large independent energy trader in the world and number 8 in terms of global fortune 500 companies. It partly divested its downstream business to Vitol, for $210 million including its gas and power businesses for $150 million. Presently, Oando focuses on the upstream sector.
Balogun asserted thus, “Today, what we say to ourselves is, it is not just good enough for us to produce. The rest of the world is moving ahead of Africa and Nigeria is slumbering. The only way out of this slumbering means, we have to be creative and as a business, we have to understand that we operate in a social ecosystem.” “It is not good enough anymore to just generate revenue, to just generate profit and return back to shareholders. It is simple, if the ecosystem doesn’t work, there will be no business.”
She said with regards to human capacity development, the government cannot do it alone, there is need for public private partnerships. “So, how do we understand that through corporate social initiatives, you are educating those who are still learning, who will lead us in business?”
The focus of Oando is not just doing business as usual, it is about how employment will be created, because if someone is employed, he will in turn employ another person. “If we don’t disrupt things, things will disrupt and affect us negatively.”
Besides, there is a lot of work to be done in the energy ecosystem. The country has abundant gas resources yet there is no power. Strategy should be made on how gas could be harnessed.
Balogun advised the country to be innovative and creative on how to get gas and motivate people to pay for power, in order to improve the economy. “If not, what will happen is that the rest of the world will move ahead and we will remain where we are.”
Speaking further on Oando’s new vision for human capacity development, the General Manager, Business Support Group, Oando PLC, Ademola Ogunbanjo, posited that the indigenous company has a huge workforce and it has set the vision. What Oando does is simple, it is important to put Nigeria to work and the company’s philosophy is to look for qualified Nigerians wherever they may be all over the world. It is only when qualified Nigerians cannot be found the company looks elsewhere around the globe for employment.
Surprisingly, the company presently, has handful of foreigners, not because it does not believe in diversity but because the first hurdle is finding a qualified Nigerian wherever the person may be all over the world and there are qualified Nigerians all over the world.
Oando has observed that young qualified people can be found in-country but there are challenges in government on education which should be tackled headlong. The country’s education system needs to be overhauled for progress. It is always a struggle to find qualified people at entry level, they have to be trained for one or two years. Effort has to be made to upscale the skills of Nigerians so that they can become employable.
Ogunbanjo revealed that Oando is the largest indigenous organization that has brought back to Nigeria the highest number of Nigerians in the Diaspora to work in the Oil and Gas Industry. “Our story is compelling, the vision is clear, we are striving to become the most desirable organization. How do you ensure that you are the most desirable organization to invest in the Oil Industry, first, is the asset portfolio and diversification which will authenticate the kind of asset the company has, Secondly, is the number of skilled workforce the company possesses.”
If the financial structure of a company is good, it becomes attractive to investors. The agenda for every organization all over the world when it comes to achieving global objectives and ensuring that they retain their people is simple. It is to build a corporate system that achieves the goals of the organization, and at the same time work in tandem with aspirations of the people. As simple as it sounds, it is the most difficult thing to do.
The General Manager, Business Support Group of Oando said the company’s ongoing graduate training programme is meant to train people for the oil and gas industry devoid of level of experience as requested in the industry for employment. The idea is to give young graduates opportunity to be qualified for employment.
Young people will be trained on Reservoir Engineering, Production Technology, Production Operators, Geosciences, Facilities and Infrastructure Engineering, Business Planning, and Petroleum Economics. They will be trained for 18 months before going to the industry. This is to prove themselves that they can work in the Oil industry.
Ogunbanjo said the gesture will solve the cycle currently ongoing in the oil industry, a situation where workforce is being exchanged by Oil Companies, especially among multinationals. The philosophy of Oando is to develop young talents within the organization who may not be technically autonomous, but understand the culture of its work space.