The Executive Director and co-founder of Sahara Group, Mr. Tonye Cole told Chineme Okafor on the sidelines of a meeting of African oil producers in Abuja, that stakeholders in the oil and gas sector now see unity of purpose as the only way out of the oil price dilemma. Excerpts:
What were some of the thoughts that operators threw around at this meeting?
I have been in this industry for the past 20 years and during this period we have seen oil prices move up and down, it is always constantly moving. But one of the last things that we saw as oil prices got to about $100 per barrel was that different companies and stakeholders in the business were positioning their own interests.
So, everybody was talking but very few people were listening. The one thing that you see when oil prices start coming down to the level that it is now is that it creates worry and make people sit down and for the first time begin to ask how can we get out of this crisis?
So, it is for different heads from different areas to come together and look at the problem from a common view point, which is what is and has been happening recently.
What is that common view point?
Now, that common viewpoint is that everybody needs to survive in this period. The government needs to survive, the oil companies need to survive and the stakeholders too need to survive, even the local communities that agitate that the crude oil is their resource need to survive.
So, that survival is why everybody needs to and should be able to come together and say how do we forge ahead from here? The next thing is that even if we survive now there needs to be long term sustainability. This is the time that people cannot fail to plan for the long term.
This is not peculiar to Nigeria or Africa, but how will the talk here influence the global oil situation?
There are solutions that are African-centric, that is, solutions for us which can work for us. So far, what we do a lot is that we import things: technology, ideas, and all sorts of services that have been developed to work for the foreign markets and operations.
It works for them and then is exported to us to work for us. What we have to do now is to reverse that trend, look at our own situation and when we can create solutions that work for us, then, we are able to export that to other areas as well.
There are many African countries that are just coming up, they just discovered their own oil and they are going through a process that we have been through; Nigeria is at the forefront of developing solutions that work within our environment which we can then use in any developing country and that is what we now need to start talking about.
Is your group doing what you are talking about?
Some of the solutions that we have found for example are cross-border solutions. Ghana, for example, requires power. Nigeria is developing power in the Public Private Partnership (PPP) model, whereby private companies who are Nigerians totally have come and looked at the model.
Because international companies all promised that they were going to come and spend money and all of that, but none of that happened, and then you have to develop a framework and policy that works within the society. So, one of the things that we did was that we sat down with the Ghanaian government and said to them that these are the lessons that we have learnt here and these are the solutions that we need to put forward there. And those kinds of things are working beautifully because you are now exporting solutions that have worked for you so that we don’t make mistakes, and we really do not need to make the same mistakes all the time because we can learn from others, and that is just one solution out of many.
Does Africa really have that capacity to develop solutions for its oil and gas production?
We do. For instance, when we started 20 years back in the oil and gas business, two things that we did at the time was that one: international oil trading was handled by foreign companies, oil financing for trading was handled by foreign companies, and thirdly, there was no indigenous local people that knew how to trade crude futures and its associated products and by trade I mean the actual trading that involves the buying and selling of crude, not the kegs, but knowing what happens in the futures, commodities and all of that. That capacity did not exist.
Today, over time one of the things that Sahara has done is that we began to train our young people and bring them up to that level such that they sit on negotiating desks, working out in Dubai, Singapore, Ghana and closing deals.
One thing you should know about Nigerians is that we are aggressive when it comes to our entrepreneurial mindsets, we believe in ourselves. So, all you have to do is to give us that opportunity to express it. We have driven up to be in the forefront such that Nigerian banks are able to do the financial aspects of oil trading effortlessly and they now open LCs and all that instruments. We know what to do all the times and we can do it.
What about the fact that the oil technology is still embedded in the IOCs?
I think that one of the things we need to look at is our inward solutions. And this means knowing what you are really good at. And once you know what you are good at you begin to develop it to meet your needs.
One of the things that Nigerians always do is that a Nigerian would take any technology that you have in your hands and will adapt it and will keep it going over and over again.
He can make it function even when other people would have thrown it away. This is one of the simple skills that we have that we don’t take note of and don’t do much about it. Yet, some people at a particular level always want to buy new thing that’s one side or group of Nigerians. But 99 per cent of the rest of Nigerians take that very new thing that has been used and discarded and get it going on by reengineering it.
Now, have we been able to capture that skill of reengineering? We see the Igbo traders who go abroad and bring in many discarded things and reengineer these items, package them and resell them. This in itself is a whole market. But we don’t understand that in that technology of reengineering is a huge market. All you have to do is to maximise and legitimise it, take it into the oil industry and move it forward.
There is a place for reengineering and there are so much more. But we have to make people know that such things are not bad. That is how China developed. They looked at things, reengineered these things and learnt how to do it and began to do it and we can do the same because we have the same capacity.
Now, after this meeting, what should be the conversations of APPA countries?
I hope that at the end of the day, all the 18 countries would create borderless thinking and this is very important because as we have worked across Africa, we found out that one of the things we have had to break down was the issue of borders and countries of origin.
After 18 years of pushing that, we discover, it is much easier to operate within the West African sub-region and today we are operating. That is another thing that the low oil price has done for Africa because it has opened up her through others because they know that we are all in this together and that solutions that work in Nigeria can work in Gabon and Tanzania and others.
Is there a parallel in Nigeria’s downstream challenges with other African countries?
In Nigeria, the one thing we have talked about is subsidy and all that sort of control. We already have a lot of lessons to learn from these sorts of issues, now other countries have to sit down and learn from us: what are the mistakes and gains we have from PPPRA and restructuring of our downstream to allow independents own at least 60 per cent of the market.
There is so much that Africa can learn from Nigeria because we have real life case studies which others can learn from and I tell people not to look down on Nigeria in a way that there is nothing to learn from here because there is actually a lot they can learn as we have learnt it the hard way and they don’t need to make the same mistakes.
Frankly, if they go to MIT and others looking for solutions to Africa’s challenges, they won’t get it. They need to come to where we have learnt it the hard way and understand the whole essence of the conversation around their challenges.
How can Nigeria get its power systems to begin to work hard for its development, you are a major player?
It is about the same principle we apply in petroleum. It is about stakeholders’ engagement because everybody has interests. In power, the interest of the consumer is steady supply, the producers want to supply light and we are all around the same interest.
Before the economics, everybody wants power and that is the principle. Once that is put in the central pole, all the stakeholders would have to come on a table to discuss and listen.
The difference that has been made in the last couple of months is that stakeholders are listening to everybody and their interests, then they are all getting around for solutions to the challenges and if we try to rush all of these, we will fail. This has to be communicated across to everybody.