Roland Ewubare is one Nigerian Lawyer who can be described as a Jack of all trades and a Master of all! He has traversed the global legal sphere as an academic, human rights practitioner, oil and gas expert, and innately, a philanthropist. In a down-to-earth chat, he shared his interesting journey with Onikepo Braithwaite and Jude Igbanoi right through till his resignation as a Chief Operating Officer at NNPC in July 2020 for personal reasons which he explained. He answered several questions which have agitated the minds of Nigerians on gas flaring, the recently enacted Petroleum Industry Act, the impact that the Dangote Refinery will have on Nigeria and our oil industry, and what we can do to optimise our mineral resources
L
et us begin by wishing you many happy and hearty returns on your 55th birthday and a warm welcome back to Lagos
Thank you so very much for the opportunity to have this conversation with you. It’s always a delight to be back home. There’s something about the vibe and pulse of Nigeria, that you can never experience in diaspora.
Your career so far, has definitely been robust and varied, and you’ve held senior positions in fields that are not even related, ranging from law practice to private equity, to human rights, to oil and gas exploration. It’s like you are a Jack of all trades and a master of all! Has your legal training been helpful in your career pursuits?
It’s a hilarious way to start this interview; but, on a serious note you must agree that legal education provides the best platform to segue into almost any career. It sets you up for pretty much any and everything, because critical thinking and thoughtful analysis are what you master as you train to become a Lawyer. I am very proud of my legal credentials, and even when people address me as an engineer or whatever, I am very quick to correct them and remind them that I’m a Lawyer and very proudly so.
We know you have two Master of Laws degrees, one from Queen Mary College, University of London, and the other from Harvard Law School. You started off as an Academic, teaching at the Nigerian Law School; then you left for the United States where you worked in New York as a Corporate Associate in one of the largest law firms in the world; subsequently, you served in Schlumberger, a foremost oilfield services company as Corporate Counsel in New York and returned as an Executive Director of Schlumberger in Nigeria. You then left Schlumberger to return to the US to start a private equity firm with some partners, before taking a leave of absence to return to Nigeria to become the Executive Secretary of the National Human Rights Commission. With the benefit of hindsight, what would you say about the Commission; is it a toothless bulldog, or is it able to deliver on its mandate to Nigerians?
I’m glad you asked this question, because it’s a very important one given where we are today as a nation. You see the Commission we have today, is not the same Commission we had when I arrived to start my gig as Executive Secretary in 2009. At that time, the Commission was essentially a parastatal under the Federal Ministry of Justice. We got our funding from the Ministry, and we were not truly independent. So, one of the most critical tasks I set for myself as Executive Secretary, was to unwind and alter the entire philosophical construct of the Commission. Working with civil society partners and the Attorneys-General I served under, namely, Mike Aondoakaa and Bello Adoke, we rewrote the enabling statute of the NHRC. The new enabling law, set the NHRC up to be totally independent and isolated from the influence of the executive branch of government. As you know, the draft law provided security of tenure for the Executive Secretary, with a stipulation that his or her removal could only be achieved upon a request by President supported by a resolution backed by two-thirds of the Senate. The funding of the NHRC, was also made a first line charge to the Consolidated Revenue Fund of the Federation. We pushed the amended law hard and vigorously, and Attorney-General Adoke was its champion, till it was eventually passed by the National Assembly and assented to by President Jonathan. Passing that law was a massive personal achievement for me, and remains one of my proudest professional accomplishments. I had almost three years left on my tenure, but I resigned in 2011 to return return to the US for family reasons, and to resume making real money in the private equity boom that was then unfolding from the ashes of the financial crises that took out Lehman Brothers and almost crippled the global economy. So, today, the NHRC has the full authority and power to fulfil its mandate, and I believe they’ve done well. Of course, every human institution has room for improvement, but given the fiscal and financial constraints that all public entities in Nigeria currently feel, I’d say the NHRC had done well, all things considered.
Let’s talk about your career in oil and gas, including your time at the NNPC where you rose to become the Chief Operating Officer of the Upstream Directorate, and later Chief Operating Officer of the Ventures Directorate. How did you get your start in oil and gas?
Thank you for asking! My first introduction to big oil, was about a quarter of a century ago. In 1998 to be precise. At the time I was an Associate in Mergers & Acquisitions at Skadden Arps in New York, and the firm had just been retained by Mobil Corporation to advise it in its proposed merger with Exxon Corporation. I was staffed on the deal. When we announced the deal on December 1, 2008, it was the largest merger ever in history with deal value of $81 Billion, and it created the 3rd largest company in the world at that time. The deal closed in November of 2009, which means we were working on the nuts and bolts of the deal for almost a year. In that time, I got to learn the dynamics of oil and gas at a high level, and I found it so fascinating. As fortune would have it, some time in 2000 I got a random call from a headhunter asking me to come interview for an in-house position in an energy company. The caller didn’t disclose the name of the company. Anyway, I went for the interview, and it turned out to be Schlumberger the largest oilfield services company in the world. On the spot they hired me as Corporate Counsel to manage all their mergers, acquisitions and divestitures across the world. It was a massive role, covering about 120 countries. I was 33 years old, and I stepped into the industry just as the global economy was about to enter a massive growth phase powered heavily by the energy from oil.
Very interesting, so you came into the industry as a Lawyer, how did you then end up in operational råoles that are typically occupied by Engineers and Geologists?
Yes, I started in the legal department, but I very quickly began to pine for an operational role, and many of the operational guys I worked with liked my approach to solving legal problems. You see, many Lawyers are skilled at identifying and highlighting impediments to operations. I had a different mindset. I believed my role expended beyond the identification of legal issues; I felt it incumbent upon me, to provide solutions and fixes to business problems. Turns out business managers and operations people really appreciate that mindset, in an in-house Lawyer. So, based on feedback to my bosses and other factors, I very quickly got promoted to General Counsel and Company Secretary of one of the major subsidiaries of Schlumberger. That was in 2002, and that prompted my relocation from New York to San Jose, slam bam in the centre of Silicon Valley in California.
That promotion was a transformational move for me in many ways, and barely two years later, that subsidiary was spun off as a separate company in an equity carve out. The successor company was subsequently listed on the NASDAQ, and eventually acquired by a competitor for $660 million. I received a significant deal completion bonus, and was ready to cash out and move on. My intention was to return to Nigeria, to start my own business. Then something curious happened. The Director of Human Resources in Schlumberger, refused to accept my resignation. Matter of fact, he flew from France to the US to see me, to make the case that I should consider an operational role in Nigeria to support the country operation there. The package he put on the table was compelling. Because I’d been recruited in the US, I was categorised as an international hire, and he offered me an expatriate relocation and compensation package to move to Nigeria. The sweetener he added, was that if I wasn’t happy with the role I could leave after six months. Needless to say, I took the offer, my wife and I bundled our 2 young kids and we moved to Nigeria. That’s how I ended up in Lagos as the Executive Director (Oilfield Services) of Schlumberger Nigeria, with full expatriate perks in a senior operational role.
So, how did you end up at NNPC? Were you headhunted from Schlumberger?
No, I didn’t come to NNPC directly from Schlumberger. I came to NNPC in August of 2015, as part of an outside team that was recruited into NNPC by the then GMD and later Minister of State for Petroleum, Dr Ibe Kachikwu. I’d known him previously on a personal level and he’s a super smart man whom I’d always looked up to, so the prospect of working with him to turn around NNPC was quite exciting. I was his very first hire, and I came to join his team from the US where I was a Partner in a private equity firm in Atlanta.
Understood. So, was it difficult making another transition back to Nigeria and into NNPC?
I always characterise my relationship with Nigeria. as akin to a relationship with a bad but irresistible lover. Like when I’m away from Nigeria, I miss the vibe and the energy of the country; but, when I come back home, I am very quickly reminded of why I left in the first place! For me, transitioning in and out of Nigeria is not really a hassle. It was tougher when my sons were younger, because relocation meant we had to worry about moving them to new schools, worry about the cultural shift and the transition shock to them and all that stuff. By the time I came back to Nigeria in 2015 to do my NNPC tour of duty, my sons were teenagers and had zero interest in coming to Nigeria. I think they’d already figured out that their father was a restless and adventurous soul, and wanted no part of my constant movement. So, I pretty much came alone with my suitcases and settled into my first role as Managing Director of IDSL which is the for-profit seismic subsidiary of NNPC. My immediate boss was Dr Maikanti Baru of blessed memory, who at the time was the Group Executive Director of the Exploration and Production Directorate. With the support of Dr Kachikwu who was GMD as well as Dr Baru, my IDSL management team and I were able to turn the fortunes of IDSL from a loss making venture into a profitable multi- billion Naira venture before I left for a new position two years later.
That’s quite fascinating. You also served as the Group General Manager (GGM) of NNPC’s National Petroleum Investments Management Services (NAPIMS) before you were promoted to Chief Operating Officer. What exactly did that role entail?
NAPIMS is the heart of the entire Nigerian oil industry. Think of it as the domicile of all our oil and gas assets, as a country. It’s that simple. All of Nigeria’s joint venture and production sharing contractual interests in the multinational and indigenous companies, are managed by NAPIMS on behalf of the Federation. Everything to do with exploration and production, including the management of our cash call obligations, falls under NAPIMS. So, you can imagine the ripple effect when I was appointed as the GGM NAPIMS. I believe I was the first non-Engineer or Geoscientist, ever appointed to the superintend over the work program and budget of Nigeria’s oil industry. The learning curve was steep, but my team and I engaged our industry partners and players, and we had an amazing run with two straight years of surpluses in trillions of Naira delivered to the treasury. It might interest you to know that, the two subsequent appointees to the GGM NAPIMS position after me have also been non-Engineers and non-Geoscientists. We broke the glass ceiling there, if you ask me.
You resigned in July 2020 as a Chief Operating Officer of NNPC. In Nigeria, its very unusual to find people resigning like you did. What informed such a decision?
Ikepo, in July 2020 the world was in the grip of a vicious pandemic. There really was a global lockdown and restriction of movement, except in narrow humanitarian circumstances. I was in Nigeria, away from my family. You recall people were dying, and folks had to hold zoom funerals for loved ones. That was the horrifying spectre that prevailed, and I really was terrified. I have to confess. I had anxiety and panic attacks about my family, and whether they’d ever see me alive again. In this frame of mind, I decided I had to pack it all up and return to my family and that’s what I did. I consulted with my boss and big brother, the GMD, Mele Kyari, and he understood fully where I was coming from. He was so compassionate, and kindly suggested that I should go to Atlanta and work remotely from there. Now, remember no one had any idea about how long the pandemic would last or how soon the vaccine would come, and I felt it would be unfair for me to be away from the rest of the management team indefinitely. It would have been convenient for a few weeks, but the difference in time zones and other handicaps would have made it untenable for such an arrangement to work in perpetuity. So, he kindly presented my resignation to Mr President, who very graciously accepted. The same day I jumped on a humanitarian evacuation flight, and exited stage and left.
So, let us ask you a broad policy question: why are the oil majors divesting and leaving Nigeria? Is there anything about our regulatory or operational environment that makes them reluctant to stay?
Nigeria is a tough place to live, for the ordinary citizen. It is a tougher place to do business and thrive, irrespective of the business in question. It’s tough to run a law firm, it’s tough to run a bank and it’s super tough to run a complex business involving exploration and production of oil and gas. That’s the truth, and we have to accept it.
Historically, the oil majors have been able to manage the tough business environment in Nigeria, because of the allure of the richness of the hydrocarbon resource base in Nigeria. We have abundant reserves of high grade and in demand hydrocarbons. Sadly, that equation is fast changing. There’s rich oil and gas deposits in all corners of the world. Here in Africa, there’s oil in Ghana, Mauritania, Angola, Mozambique, Kenya, Uganda and I could go on and on. Bottom line, Nigeria is no longer the only spot with hydrocarbon deposits. The oil majors now have multiple options, and in deciding where to deploy or retain their investment dollars, they focus on cost of operations. In oil and gas, we measure everything from the perspective of cost. What’s the Unit Technical Cost per barrel? What’s the complexion of operating expenses and capital expenses? It is the answers to these questions, that drive the investment decision. The cost profile in Nigeria has been escalating aggressively, for almost 30 years. If you ask me, I would say the agitation in the Nigeria Delta laid the seeds for cost escalation. People of the region complained rightly about neglect, exploitation and despoliation of the region, and rather than engage intelligently with the indigenes of the Niger Delta, the then military government responded with a militarisation thesis. It didn’t work, and it only led to more agitation and outright hostility to the oil producing companies. They in turn, responded by increasing their security budgets. By the time I arrived Nigeria as Executive Director of Schlumberger our security expense was the second highest line item in our variable cost budget. Totally ridiculous state of affairs. That was 20 years ago. I hesitate to imagine what the costs are today. If you have to run an oil operation in an environment where your host community youth kidnap your expatriate staff, vandalise your pipelines and consistently sabotage your operations, you would have a hard time justifying to your shareholders why you need to remain in that environment when there are other countries happy to welcome you and your investment. You’ve got to realise that the investment dollar only goes to where it is welcome.
Now that you have brought this conversation to host community issues with oil companies, why is it easier to sue these oil majors overseas in their home countries for breaches that occur in Nigeria? Doesn’t that state of affairs deprive Nigerian Lawyers of the work and fee income?
I like how you keep dragging me back to my roots as a Lawyer. You see, a Plaintiff who suffers injury wants justice and compensation. I’m not sure they care about the venue where the justice is delivered. That’s just plain human nature. I think the real question here has to be couched differently, in other words, why is it so hard to get justice in Nigeria? I believe that is the real question. If an Ogoni man could get a judgement against Shell for example from a Nigerian court that would be enforceable in a timely manner, why would he need to go to New York or The Hague to sue? It all boils down to the administration of justice framework in Nigeria. Now, don’t get me wrong, there’s also a small issue of litigation strategy around what we call the “deep pocket” theory. What this means is that you sue the parent company abroad, because they have a lot more money and resources that you can attach if you secure a judgement. That said, I believe the stress and anguish of grinding through the judicial process locally, puts many people off. People just say “to hell with it”, and they file suit abroad. In terms of depriving Nigerian Lawyers of work, that may not be entirely so, because even if you file these suits abroad, you’ll need local counsel on the team.
Can you speak to the volatility of oil prices and the rush by the first world to find alternatives to oil, and how Nigeria can optimise its oil resources whilst we stay relevant with renewable energy?
Let me begin with the resource optimisation question, as that’s a lot easier. We just need to ask ourselves, how others have successfully done the same thing. How have Norway, the UAE, Saudi Arabia, Qatar and others optimised their own oil and generated enormous development? Why reinvent the wheel, when there’s a template of success that you can copy? The problem with us as a people is that we make very simple things complicated, and make very complicated things appear simple. That’s the problem. Instead of fighting the oil majors and whining and complaining about how they are cheating us, we need to develop a proper compact that encourages them to invest in Nigeria. The more investment they make here, the more jobs are created and the multiplier effect on the economy is massive when you tie in the local content linkages. Unfortunately, our policy makers and lawmakers haven’t seen the logic of this approach. Instead they’ve adopted a nationalistic focus that hones in on increasing the immediate revenue to government, by enacting legislation to alter the sharing and distribution of oil revenues between the government and its partners. The result of this has been a near total freeze on investment by the oil majors in Nigeria. How do you do business in a country where you provide your own power, you provide your security, the infrastructure is deficient, and then the same government seeks to claw back your assumed and projected share of profit by what’s essentially retroactive legislation? Would you stay if it was you?
Now as far the question on renewable energy goes, my personal take is to totally discount the conversation as a waste of time as far Nigeria and the developing world is concerned. In fact, any conversation about renewable energy irritates me, because it smacks of gross hypocrisy. The industrialised world which polluted and destroyed the environment in order to power its development, now tells us to slow down or even stop exploration and production of oil and gas because it exacerbates global warming and climate change. How dare they? It’s total nonsense. The entire African continent contributes less than 3% of all greenhouse emissions, so, why should we be the ones to bear the brunt of fixing a mess we did not create? I recall being a speaker on a panel at an energy conference in Abu Dhabi before the Covid lockdown, and this same debate about renewable energy came up. I told them that we have no reliable grid electricity, so any talk of migration to electric vehicles is meaningless to us. I don’t think there are up to five Tesla or other electric cars in Nigeria. We are still at that stage where people still use firewood for cooking and for basic energy needs, and they want to talk to me about electric cars and wind farms and solar power. Total nonsense. No country in this world, has attained development from sole reliance on renewable energy. My apologies for being heated and emotional on this issue. It really irks me.
Let’s talk about gas flaring. Isn’t there a better way for us harness all our gas resources, instead of just burning the gas and creating environmental problems?
The simple answer is yes, we can do a lot better with our gas assets. The truth is Nigeria is really a gas basin, with some little oil. Gas is where we have a dominant position, in terms of aggregate proven and probable reserves. There’s some valid operational reasons why gas is flared, but given our severe energy deficiency as a country, we really should be sequestering and capturing gas that would ordinarily be flared as a result of upstream production activity. The problem is that the regulatory framework and requisite infrastructure to support elimination of flaring is nascent, if not moribund. So, the operators just drill for their oil, and the associated gas that they encounter is either re-injected into the well or burnt as flare, and they happily pay the penalty which is imposed for flaring. It’s that same deficient framework that has made it more profitable for us as country to export our gas in liquified form to global markets, whilst our domestic need remains unmet.
Let me follow up on the points you’ve just raised about exporting gas versus utilising the gas locally to develop Nigeria. Why are we in such a situation?
In simple terms, there two markets available for our gas resources. The international market which we supply with Liquified Natural Gas (LNG), and the domestic market which we supply to support the power generation companies, as well as manufacturing and other commercial type entities. By far the largest consumers of domestic gas are the power generating companies, which really are privatised assets of government with major residual baggage from historical operations. Many of them really, are technically insolvent. So, they can’t even pay on time for the gas they are supplied with. If you are a producer of gas, wouldn’t you rather sell to the export market where you have a guaranteed 30 year contract with pricing in US Dollars? Would you be inclined to develop a gas processing plant only to sell the gas you produce to local Naira paying companies who wouldn’t even pay you? That’s the reality. We have policy instruments that impose a domestic supply obligation on the oil companies, but in reality, you cannot force them to undertake gas development projects given the facts on ground.
In my time at NAPIMS we sanctioned the Assa North Ohaji Gas Project and took the Final Investment Decision (FID) at a cost of $1.6 billion, if I recall correctly. That’s serious money, and that’s what it costs to build gas processing plants. So, again, I ask you why would you deploy that quantum of cash to support Nigerian customers who won’t pay? Same way they refuse to pay their Lawyers, is the same way they refuse to pay gas bills. In fairness to the power companies, they themselves are owed by the consumers of power, so it’s a vicious cycle of bad debtors!
What impact will the Dangote Refinery have on the economy, and do you have any thoughts on deregulation of the price of petrol?
The Dangote Refinery is an absolute game changer. It’s a massive project that, upon completion, will impact our economy almost immediately in profound ways. We are talking about a refining capacity of 650,000 barrels a day. That quantity of refined products will more than meet our consumption, and there’ll be abundant supplies left for export. We are talking self sufficiency and energy security on one hand, and conservation of foreign exchange which we currently use for importation of fuel products.
As far as the deregulation question goes, both sides of the debate have meritorious arguments, but we must be honest about our economic situation. We are not a rich country. We also haven’t evolved to the point where we have robust enough processes to manage a subsidy regime, without brazen corruption and outright thievery. So, rather than waste our lean resources on subsidising a false price for petrol, let’s for example use the N4 trillion in this year’s subsidy budget to support the development of transport infrastructure, to enable mass movement of citizens. In any event, as long as our neighbouring countries have a deregulated petrol pricing regime, our own regulated pricing creates a loophole for arbitrage through cross-border smuggling. It’s tough but it’s one of those bitter-pill type scenarios. We have to do what we need to do. We need to completely deregulate the pricing of petroleum products.
Let’s move on to the Petroleum Industry Act of 2021 and it’s impact, if any, and if you could please tell us about how the host community provisions would bring about peace in the Niger Delta.
The new Act is a welcome development, to the extent that it has consolidated the various pieces of existing legislation into a single updated document. That’s commendable. That said, my opinion is that the Act is a little too late in coming. The conversation about a robust legislation, started over 20 years ago. We wasted too much time going back and forth, and I fear the global oil industry has moved on and left us behind. When we started talking about the then PIB, Guyana as a country wasn’t producing a single drop of oil. They started production late in 2019, and in March ExxonMobil announced that they would be producing 1.2 million barrels a day in Guyana by 2027. That’s more than half of what Nigeria produces at peak capacity. So, whilst we were blowing grammar and arguing back and forth in the National Assembly for 20 years over PIB, the rest of the world was moving on and eating our lunch in the process. Our new Act is, as they say, in Texas, a day late and a dollar short.
Now, the host community conversation is a whole different bowl of wax. It is now so complicated that, I’m not quite sure if the host community trust fund alone will resolve the issue. We must accept that whilst there’s some genuine and sincere agitation, there’s also significant criminality masquerading as resource control agitation. I am an Urhobo man, from deep in the Niger Delta. Forget my fancy credentials and speaking of English, I have some intimacy with the issues that generated initial agitation in the swamps and creeks. Those issues will need to be addressed in a comprehensive manner, that goes beyond just throwing money into bureaucratic entities like the NDDC or the Ministry of Niger Delta Affairs. That approach even creates more problems, as we have all seen with the recent probes and drama involving those agencies. An absolute shame.
Now that you have attained the grand old age of 55 as you like to put it, what are your thoughts on life and the future of Nigeria, and do you have any plan to return home to serve again?
I am truly grateful to the God, for the life of adventure that he’s led me through so far. I have at different times been an academic, a Wall Street deal Lawyer, in-house counsel at a global corporation, a senior executive in a publicly traded company in Silicon Valley; I headed the National Human Rights Commission, I’ve been a Limited Partner in a private equity firm in the US; I headed two major NNPC entities, and became Chief Operating Officer of two different directorates in NNPC. It really has been an amazing run. In the past 25 years, I’ve lived in 26 homes in 10 cities in three continents. I’m done. It’s time to retire, and settle down.
As far as Nigeria goes, I think the 2023 transition will be pivotal one, and the future for Nigeria is bright if we tackle the problem of the big elephant in the middle of the room which no one is talking about, namely, the large number of out of school children, and the demographic explosion that confronts us. If the economy is well managed and we see meaningful GDP growth, then we will be fine. The alternative is too harrowing to consider.
As for my personal plans going forward, I have zero desire to return to Nigeria to seek private or public sector employment. I’m already back to doing what I enjoy most, which is teaching. Last semester I taught a class on energy policy and climate change as a visiting Professor at Georgia Tech. Next year, I’m planning to teach a seminar group at Harvard Law School on Climate Change. These endeavours, keep me intellectually stimulated. I still have an active role in private equity, and that’s where I make the money to feed my family and do philanthropy. So I’m good.
Thank you Roland, for an extremely interesting and informative interview.
