IN BUSINESS
TBY talks to Felix Amieye-Ofori V., Managing Director & CEO of Energia Limited, on changes in the oil market, trading downstream, and the importance of CSR to long-term strategy and development.
BIOGRAPHY
Felix Amieye-Ofori V. graduated with a degree in petroleum engineering from the University of Port Harcourt, holds an MBA in international business management, a master’s degree in economics, a LLM in business law, and post graduate certificate in financial risk management. He began his career in the oil industry as a Production Technologist with SPDC, and is currently Managing Director & CEO of Energia Limited.At a time when many international companies want to enter the market, what does it mean for Energia to be a wholly indigenous E&P company?
This is a natural resource company and therefore we are dealing with nature and that is indigenous. The owners should participate in the country's natural endowment. We expect nothing less.
Last year you mentioned plans to build a refinery (together with your partners) with a modular plan scalable to 30,000bpd in capacity. What is the status of this project?
We have moved forward two steps. We scaled down to a 10,000bpd plant for a start. We have our first license to establish (LTE) from DPR, and we have signed a contract with an EPC contractor in Houston for Front End Engineering Design (F.E.E.D), after which we will go into the engineering work, fabrication, installation and then commissioning. We are also working on several agreements with potential offtakers and project managers. The refinery will be a completely separate entity as it is downstream and different from our upstream E&P business, which means that we are adding further value in country. The upstream segment will be trading with the downstream company through an arms-length agreement. Our plan is to commence clearing the refinery site in 2016 to prepare for the utility facilities construction. This is while the Houston EPC contractor works on the fabrication of the main processing plant. We are targeting 1Q2019 for the plant's commissioning.
Will the final products from the refinery be for the domestic market or for export?
For now it is intended principally for the domestic market. We operate out of Delta State so we have a certain catchment area and it will not be a big refinery plant.
What impact has poor global oil prices had on Energia Limited and how are you dealing with this challenge?
It changed because rather than importing, the US started producing. OPEC used to take the heat, but on this occasion it said no, and all members want to maintain their market share. However, this situation creates a wider positive outlook because it is going to make the industry more innovative and efficient. For oil-dependent economies such as Nigeria, it is going to help us look inward.
What steps is the government taking to help companies face this tough economic situation?
Before the price fell, the government sat on the Petroleum Industries Bill (PIB), but it is now clear that it has to deal with the reforms. But, it has also seen that it is not going to be easy within the present structure. Therefore, it is going to phase it in. This will provide the regulatory framework to give investors the support they need, such as what terms will guide their investments. The government still has a lot of challenges and only four years to turn things around and we are hoping this will happen.
What is Energia Limited's role in terms of social and economic development of the country through CSR programs and employment initiatives?
We give about 4% of our gross revenue to CSR and have a trust fund that we set up to manage this money, whose board meets on a quarterly basis. We have set up a community parliament where we meet to discuss issues. We have established a number of institutions, including a secondary school, and one of our communities is building a new housing estate. We pave roads, and we have created and funded a community security program as well.
What are your expectations for 2016?
Our goal for 2016 is to remain successful because we believe we are one of the lowest cost producing companies in the country. We produce at USD18 per barrel. Even if the price of oil comes down to USD20 we will still be in business. This is our plan.
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