Jan. 25, 2015

Tunde J. Afolabi


Tunde J. Afolabi

Chairman & CEO, Amni International Petroleum Development Co. Ltd.


Tunde J. Afolabi is the Chairman & CEO of Amni International Petroleum Development Company. He holds a Bachelor’s Degree in Geology (1973), from Franklin & Marshall College, Lancaster, Pennsylvania, US, a Master’s Degree in Geology (1975), from Tulane University, New Orleans, Louisiana, US and a Doctorate of Technology (D.Tech) (Honoris Causa) from Ladoke Akintola University of Technology, Ogbomoso (2009). A professional Geologist, he has over 35 years of Oil and Gas Exploration and Production experience with International Companies. He is a member of the American Association of Petroleum Geologists (AAPG), a Member of the Order of the Federal Republic (MFR), a past President of the Nigerian Association of Petroleum Explorationists (NAPE), and a council member of the Nigerian Association of Indigenous Production and Exploration Companies (NAIPEC).

You recently acquired the majority stake in AMNI. Can you please explain the reasons behind this decision?

The majority of the shareholders who divested/sold their shares are well advanced in age, and have little appetite for risk. The oil and gas business is quite a risky one, and companies who do not invest in their growth will not only stagnate but eventually die. Therefore, the decision to bring on board those who will take these risky business decisions was not a difficult one to make.

Many of the larger IOCs are currently retreating from the country and selling their assets in the Niger delta region. Does the company have any interest in acquiring new oil fields in the area?

We participated in Shell OMLs 71 & 72 tender, which we did not win. There are other IOC assets we are looking at. This process is more like reserve-based lending, and fortunately, we have some ongoing production, and are, therefore, able to leverage this to raise equity. The local banks are aggressive in terms of supporting successful indigenous companies, and the majority of companies to have won these blocks are indigenous. As indigenous players, we bring a different perspective to operating in these environments than the IOCs' current mode of doing business. There are opportunities for people who know the terrain to make a significant impact.

As the current President of the Nigerian Association of Indigenous Petroleum Explorers and Producers (NAIPEC), what advice would you give to a company interested in the industry?

The most important thing to know is the imperatives of oil and gas business. Some people know the downstream business well and believe it is just as easy to operate at the upstream end. However, investing $50 million in downstream operations is quite substantial with manageable risks. $50 million in the upstream sphere will drill only one well, which could easily transpire to be dry.

Diezani Alison-Madueke, the current Minister of Petroleum Resources, foresees an oil and gas industry where 60% of all companies here will be indigenous by 2015. What is your opinion of this?

By the grace of god, everything is possible. Nigerian production is at 2.4 million bbpd. Indigenous companies are struggling to produce 10% of this. By 2015, we should be able to achieve 15% market share. By 2020, perhaps we can reach 60%. The IOCs are the ones with the necessary funds for deep water production. There are a further 20 billion or 30 billion barrels of oil in deep water. I do not foresee much competition between IOCs and the indigenous players for deepwater play. The IOCs are leaving more difficult terrain, onshore production, and operating where they have better control and more experience in deep water production.

As a geologist by training with over 40 years of experience in the field, where do you see the next opportunities in Nigeria's offshore sector?

IOCs are going to keep moving further and further offshore and continue to divest their assets onshore, or in shallow water. The opportunities in Nigeria lie in gas. I think we should be able to capture the opportunities within the West African region before looking elsewhere. I also believe that it is easy to succeed if you are not overly ambitious and do not have people siphoning your resources elsewhere.

From a regulatory standpoint, which improvements would you like to see for indigenous companies?

The new PIB is taking care of the complaints we have had regarding the fiscal terms under which we operate and opportunities to compete for assets that have been divested by the IOCs. It is difficult for indigenous companies to operate on the same fiscal terms as the IOCs, which are operating large reserves compared to those of indigenous counterparts, which underlines the need for a more favorable fiscal regime.