BEST IN BUSINESS

Nigeria 2020 | ENERGY | INTERVIEW

“ODENL's vision is to be proudly Nigerian, but in terms of operations, we want to compete with the best worldwide."

Chijioke Akwukwuma
BIOGRAPHY

Chijioke Akwukwuma is the founder and Managing Director of ODENL. He has over 22 years of diverse leadership experience in offshore, engineering, project management, strategic planning, and business development in 10 countries across Europe, Africa, and Asia. He was the first Nigerian to manage an ultra deepwater fifth-generation drillship, and was a driving force in getting the International Association of Drilling Contractors (IADC) established in Nigeria. Under his leadership, ODENL has gone from being a concept to the largest Nigerian deepwater driller, with a reputation for excellent service delivery. He holds a degree in electrical and electronics engineering from the University of Benin and an MBA in general management from Heriot Watt University.

How did you manage to bring the company to this stage in such a short time?
The company was founded in 2015 and started operations in 2017. In Nigeria, we have operated USD1.2 billion worth of assets, and we are looking to grow our footprint. We took advantage of the policies of Nigeria Content Development and Monitoring Board (NCDMB), which wanted to increase participation of indigenous companies in the oil and gas space; however, we also wanted to make sure that we are promoting value to our clients. ODENL's vision is to be proudly Nigerian, but in terms of operations, we want to compete with the best worldwide. What has set us apart is our professionalism, service delivery, and Nigerian roots.

How did you manage to invest in your fleet and equipment?
We spoke with several international drilling contractors about what we wanted to do. We were looking for companies that were the best strategic fit for us in terms of our outlook, professionalism, and values. We went into partnership with Valaris because we felt it was the best fit, and this has proved to be right decision as it is clear that we would not have succeeded without the backing of such a sound company. Valaris is an investor and minority stakeholder in the business, so we are still a 100% indigenous company.

How do indigenous players manage without international partnerships?
Not many Nigerian companies have been able to grow in a sustainable manner, especially in the services sector. All those who have been successful have had an international partnership. We have been speaking with NCDMB and the regulators, saying there needs to be more stakeholder engagement. If we are to succeed in developing local capacity, financial institutions have to play a critical part, as there needs to be more long-term thinking about how loans are structured for industry participants. Otherwise, we will take one step forward and several steps backwards. Those discussions are still ongoing and we hope that they will go in the right direction, but as most things, it will take some time.

What is your opinion of the new deep offshore royalty passed by the government?
While we understand the government's intention, there is concern in some quarters that the opposite of what it is trying to achieve might happen. While it is true that government revenue has been less than desired, the uncertainty around the Petroleum Industry Bill (PIB) has in fact resulted in more loss than the royalty issue. If the PIB had been sorted out and there was a more robust framework, a large amount of the money that has gone to Mozambique and Ghana would have found its way to Nigeria.

What if the government's intention is to fully localize the offshore space?
If we look at the onshore space, which has been localized, it is still not optimized. Many of the fields owned by local entities are still not in operation, even after several years. This is because they lack either the technical or the financial capacity. Raising funds is a challenge. If we can get local enterprises to form a rig-sharing club and string them together into a 10-15 well operation, then what was not economically viable for each of them individually may become viable as a group. And it may be possible to procure funding for this type of “club." The same idea will not really work in the offshore space, where the technical and funding requirements are multiples of what they are in the onshore space.

What is your outlook for 2020?
I am cautiously optimistic about 2020. On the deepwater drilling side, I do not see that much growth in the market. Even before the announcement of the law revision of the royalty terms, I did not see much growth.