Can you tell us about your most recent operations?
In 2015 Aiteo acquired a 45% equity share in SPDC, Total, and NAOC of the Oil Mining Lease (OML) 29 (with three producing fields) and the 100km Nembe Creek Trunkline (NCTL). Following the acquisition, SPDC continued to operate the two assets and as of September 1, 2015, when Aiteo took over the operatorship, average daily production was 23,000bpd. What did we do? We looked at the portfolio of our assets within producing fields, with four clear roadmaps. Safety takes priority an with emphasis on security of our personal, contractors, and facilities critical to operational success. We also have a short-term strategy of sweating the producing fields by maximizing well intervention portfolio studies with focus on low-cost, low-hanging fruits to ramp up production. We carry out rigorous asset integrity activities to revive/replace vandalized and damaged production facilities and well head equipment. We also strive to see our communities as stakeholders. By December 2015 we had increased production from 23,000bpd to 60,000bpd. By the end of 2016, we reached a peak of 95,000bpd. Our current production is about 85,000bpd. Being a brown field, with old wells, ageing equipment, and facilities with other challenges, a great deal of reviews, spend, and work had to be done and is still being done.
How achievable is your target of 150,000bpd?
We have a projection of those activities that will increase production, which are all CAPEX dependent. These are medium- to long-term activities driven by capex investment in existing producing fields and green fields that will grow production beyond 150k bpd. The government had earlier in 2017 announced the stoppage of JV funding and advised oil companies to source for alternative funding, to fund/execute those new developments and projects for incremental production going forward. We know as a company that we must develop new oil in order to sustain and grow production. We have worked and matured those new wells and associated opportunities that would grow this production. We know what to do to get to 150,000bpd; we have a world-class asset with huge reserve base, we have the technical and operational capacities, and, by 2018, I believe we can start these activities.
What role do you play in power generation?
Aiteo is part of a group of companies involved in downstream, upstream, and power. We are working closely with our power team and government to see how we can get the produced gas to the power plants. Additionally we are looking at other options of how to utilize and monetize the incremental gas that will come from the incremental production from new oil developments.
As an indigenous company, what gives you the edge over multinational companies?
Growing indigenous companies is one of the key objectives of the Nigerian content law; the law, among other things, is intended to ensure that Nigerians play strong roles in various businesses and the industry space, including oil and gas. Indigenous companies understand the terrain better; we are very hungry to make our mark and are very keen to keep pace with technology developments, applications, and deployments in developing and growing local capacity. Indigenous companies want to demonstrate that with the experience Nigerian contractors have gained from working with IOCs, they will continue to drive the development of divested oil and gas assets to global standards, including capacity development at younger ones.
Do you believe in the “end of easy oil" notion and what is your vision on renewable energies in Nigeria?
While many talk about the end of the oil era, I am one of those who think differently. Africa will still be dependent on oil and gas for many years to come. We do not have a stable power supply or adequate road infrastructure, so how will we be able to drive electric cars? Europe only holds a certain portion of the world's population; our population is increasing and many countries will still depend on fuel and gas for a long time. There are targets for fossil fuel to disappear from the roads, but in Africa there will be a gap of many years to fill. Outside of Lagos, we do not even have good roads and I don't know how electric cars will fair on those roads, even if we had an adequate power supply. Though the other types of energy will eat into the percentage of oil-driven cars with time, I believe that a larger proportion of the energy mix will still be oil and gas.
What is your vision for putting an end to Nigeria's reliance on imported finished products?
If we do not have the right pricing at the pumps then investors will not come. People who want to invest need to be able to adapt to the market price rather than a fixed price from the government. We have not had it right over the years because there were subsidies. The government sets a price for the pumps but our costs of production are far more than that. People who are looking into investing in refineries will assess if the business environment will be right for investments to make reasonable returns; if the answer is positive, then they will likely invest.
What it your outlook for the year ahead?
I expect in 2018 to grow our production. We look forward to having more uptime on our NCTL pipeline for sustained production without any vandalization of our assets or other security issues. We want to secure our assets, work, and execute new activities to grow production, maintain our asset integrity, and also meet all our obligations. Once we can sustain the momentum, I have no doubt we will be looking forward to a healthier business in 2018 and beyond.