Offshore is next frontier for oil exploration – Akpofure

Akpofure

The Financial Controller, Nigeria, FMC Technologies, a United States-based oil company, Mr. Egra Akpofure, says the high-potential offshore space is the next frontier for exploration drilling in the nation’s oil and gas industry, in this interview with ‘FEMI ASU

What do you think about the current state of the Nigerian oil and gas industry?

The Nigerian oil and gas industry is beginning to witness some very genuine desire to grow. As it is today, there are new contracts that are coming up and there are new fields that are being discovered, with new opportunities being generated for the entire country at this time. One key thing that has happened in this industry today is the local content development.

Most of the oil majors are now beginning to develop local capacity to do exploration and also to build subsea systems locally, this is where FMC Nigeria comes in. It is an exciting time for us because we will begin to see growth in every direction and we are contributing to that locally by the assembly of subsea systems here in Nigeria.

Do you think Nigeria has harnessed the potential in the deepwater space of the oil and gas industry?

I will say if you look at Africa in general, Nigeria is one of the places where you have a lot of capacity for offshore drilling and oil production. It is quite vast. It is an area that Nigeria is beginning to move to. Of course if you see what is happening today with the oil majors, they are moving from the onshore to offshore and this is where the potential really is. This is where they are going. We see it growing in the future. This is the direction they are all going and we will see it growing more and more and this will keep happening as we see things develop.

Some oil companies have suspended deepwater projects due to regulatory uncertainty. If the Petroleum Industry Bill is not passed soon, don’t you think it will limit the number of offshore projects coming on stream?

I don’t think so because in spite of the PIB debate and all that, we still see companies like Shell, Total, and Chevron still investing in the offshore business. I don’t think the PIB is a key determinant in this respect. Oil will keep being drilled and we have seen investments in the last one or two years in deepwater. We expect that this will continue into the future. More so, the government is aware of the concerns of the oil companies. In the end, a workable document that will take care of the needs of the different stakeholders will emerge.

What makes the Nigerian oil and gas space still attractive to some investors despite the challenges in the industry?

I think one is the enabling environment that this government is providing. Government is providing some support and showing genuine interest in the growth of the energy sector. The interest of companies such as ours in particular is to continue investing in both Nigeria and subsea systems. We are here not for the short term but to stay. We are expecting that going forward, this will remain the trend.

Our long-term goal is to continue to build subsea systems in Nigeria. Our innovations and people are key advantages that we have always had in all the things that we do such as in human capital development and building local manufacturing capacity in this country. This is what has enabled us build the first made-in-Nigeria subsea system. We are here not for the short term but to stay. We are expecting that going forward, this will remain the trend.

Will the recent fall in oil prices hamper investment in deepwater?

I think the reduction in the price of oil today is a temporary thing. We are expecting that at some point shortly, it will pick up again. I don’t expect it to affect the investment in deepwater field development. The world economy is growing and oil will keep being in demand. I seriously expect the prices to climb again.

It is believed in some quarters that some foreign companies are flouting the local content law. How true is this?

We have a good record with NCDMB. We were audited against the Nigerian Content Act during project execution and were found to be a classical example of how to implement the Nigerian Content Act. I think the local content law has achieved big success. For instance, people like me came into the industry as a result of the Local Content Act that came on stream in 2010. It enabled most of the companies to begin to build local capacity and more importantly building country management team that comprised of Nigerian professionals. There is emphasis on training, emphasis on getting Nigerians to occupy key positions in the industry, getting Nigerians equally to be technologically competent in the work that they do. This is what the Act has helped us to do.

The milestones that we have been able to achieve in FMC include the first subsea system that was engineered, manufactured, tested, installed and serviced in Nigeria. It took us about three years, and we are proud to be the first to accomplish this in Nigeria. FMC Nigeria has been in operation since the year 2000, but in the last four years, we have witnessed tremendous growth that marked the era when we began to manufacture our subsea system locally. We are not only doing the manufacturing, but we do the engineering, the testing, installation and servicing of those systems locally. These things in the past used to be done abroad, but today it is being done in Nigeria.

What are the challenges that need to be fully addressed in the oil industry?

The critical one is the human capital development and dearth of skilled subsea professionals. The way we have tried to address this is not only to identify talents but to adequately train them to fully take charge of the engineering, manufacturing, installation and servicing of these subsea equipment locally. The other one is improvement in the infrastructure needed for subsea execution. We have addressed this by partnering with NCDMB and SNEPCo with the provision of horizontal boring machine at Aveon Offshore in Port Harcourt for machining of subsea and related components.

Where do you see the industry in the next five years?

With the level of investment and the efforts being put in by the government, including the PIB, I expect the oil industry in Nigeria to be a lot more developed and more Nigerians having better positions in the industry. I am expecting a lot of activities and more interest by the foreign companies to do business here in Nigeria.

I think the adoption of new technologies in deep water exploration and production will continue to grow in the country and also have significant impact in the Gulf of Guinea region. The subsea oil production that we find today is highly technologically driven and it is the direction to go. We completely see technology transfer being the long-term achievement of this kind of process that we have in place today. We are hoping that we will continue to see advancement in technology locally that will help us to continuously grow our business.

What were the challenges you encountered while building this subsea system?

 PUNCH.