TBY talks to Folorunsho Alakija, Chairwoman/CEO of Famfa Oil, on partnerships with IOCs, low oil prices, and the banking industry's involvement in oil & gas.

How would you describe the significance of your partnership with Chevron and Petrobras?

This partnership is not only beneficial to the partners, but also to the country as a whole. Our current production capacity is 250,000bpd but our production averaged around 242,000bpd in 2016. Producing 250,000bpd is significant to the economy, as it has increased the government's revenue from oil sales. This current government has just presented an oil production estimate of 2.2 billion barrels for its 2017 budget. Petrobras has always been known to be a giant in deep water experience and as at the time Agbami was to be developed, Famfa and Chevron needed such a partner, and the outcome of this kind of partnership is stellar performance in terms of production. On a larger scale, local content has benefited the most from this partnership as indigenous companies were allowed to bid for some segments of the project thereby building their capacities in these areas. The partnership has also helped nationals in bridging the technology gap in the deep offshore terrain as well as exposed them to the management of deep offshore exploration, development and operations.

The low oil prices are a general concern. Instead of seeing it as a drawback, how can investors take advantage of these situations?

Such periods are generally characterized by low earnings for most companies; therefore, we are all in the same boat. However, low oil prices have actually presented investors with the opportunity to acquire oil blocks at a lower price than what was obtained during the oil price boom. We have also reviewed our process to make it more efficient, thereby reducing production cost without compromising on safety and quality.

How would you describe the importance of the oil and gas sector in terms of job generation in Nigeria, and what role does Famfa Oil play in supporting the local content development strategy of the federal government?

The oil industry is a vital industry in Nigeria. It has created opportunities for Nigerian entrepreneurs, which in turn serve as employers of labor to a great number of Nigerians. The industry alone creates over 65,000 direct jobs in Nigeria and more than 250,000 jobs in non-direct employment. Famfa is a fully indigenous company with 100% Nigerian workforce and over the years has built capacity in its workforce through both local and international training that have empowered them to jointly manage and operate a world class floating, production, storage, and offloading (FPSO) facility. Famfa with its Agbami partners are strongly supportive of local content development through the training and development of local manpower. We ensure compliance with all the relevant local content guidelines in support of the government's policy.

The government is working on a new petroleum regulatory framework. How do you expect this legislation to influence the future of the sector in Nigeria?

The regulatory framework is expected to drive investment in the oil and gas value chain. It should promote the development of local content and create a conducive business environment for all stakeholders. The government must ensure it does that and not the opposite. We hope for the best fiscal policies when the legislation is eventually passed.

How significant is the role of the banking industry in supporting the oil and gas industry?

Banks have been supportive of oil and gas through reserve-based lending (RBL) for the upstream sectors and asset-based lending (ABL) for the downstream sector. However, our local banks do not have the huge financial resource/capacity needed to adequately fund oil and gas operations, especially deep, offshore field development. The low oil price and high exchange rate have negatively impacted the ability of a number of operators to repay their loans, which have turned out to be too much of a burden for the local banks, which are now struggling.

Nigeria is Africa's largest oil producer but still suffers from refined fuel scarcity. As an expert in the industry, what is your opinion on this?

The previous scarcity was due to the non-liberalization of the downstream sector, which has now been addressed by the current government. The low production capacity of our existing refineries is also part of the problem. Hopefully, with the imminent launch of the Dangote refinery and others in the future, coupled with federal government efforts in attracting investors to refine locally, the scarcity will be a thing of the past.

As the role model that you are, what do you think should be done to empower and unleash the potential of girls and women in Nigeria?

Research has shown that contrary to age-old beliefs here, the mental capability of a girl is in no way inferior to that of a boy. If exposed to the same instruction and care, they can both achieve similar feats. Girls should be allowed to dream and be supported to achieve their goals. They should be encouraged to break frontiers and make a difference. They should be allowed to choose their professions freely and allowed to pursue a career to the very limits of their chosen field. The leadership potential of girls can be developed via the provision of adequate and impactful leadership training programs, especially for those that are in highly discriminatory environments. Finally, women already in leadership positions must create forums for younger and aspiring females and demonstrate how they have been able to navigate and succeed in their chosen fields of endeavor.

In addition to being a businesswoman and designer, you are also a philanthropist. Which nonprofit initiatives are you most passionate about?

I was inspired to set up the Rose of Sharon Foundation in 2008 and our vision is to alleviate the plight of widows and orphans. We accomplish this through programs that give financial independence and educational opportunities to widows, their children, and orphans. Our desire is to reach out and touch as many widows and orphans as we can in order to make the world a better place for them.