President, Oil and Gas Trainers Association of Nigeria (OGTAN) and Managing Director, Danvic Petroleum International, Dr. Mayowa Afe, in this interview with Adeola Yusuf, bares his mind on topical issues in Nigeria’s hydrocarbon space.
What are stakeholders doing to close the gap between the oil and gas industry and the academia?
The gap is being bridged. Some companies had to set up schools to train Nigerian graduates. Shell set up Shell Intensive Training Programme to be able to train Nigerian graduates before employing them. Companies like ExxonMobil put in place scholarships to send Nigerians abroad and hire from them. Even some companies were not recruiting from Nigerians; they were going abroad to recruit Nigerians who schooled abroad. The fact is that when Nigerians go to any university abroad, they come out with flying colours. So, the question is not whether Nigerians are brilliant, the problem is our system that is not adequate. But I can tell you that in the last 10 years, there have been a lot of interventions that have brought significant improvement into the universities. I am glad to tell you that the gap is tremendously closing.
Many operating and service companies still apply for substantial expatriate quota approval from the local content board, claiming that requisite capacities are not available in-country. What is OGTAN doing to equip Nigerians with these skills?
Since the Nigerian Content Act was enacted in 2010, there has been significant progress in capacity development for the oil and gas industry. Since the last Skill Gap Audit funded by NCDMB, OGTAN members have built extensive capacity to tackle this challenge. We are currently developing the Nigerian Occupation Standards for the Oil and Gas industry (NOGOS) with respect to training deliveries to international standards. Again, OGTAN, with the support of the board, is championing another data gathering strategy and categorisation of our members outside the proposed NOGOS effort. This will help to identify these seemingly non-existent capacities and equip Nigerians with the skills. It will further provide a veritable skill gap analysis and needs assessment plan. In the last two years, OGTAN has pressed the case for more localisation of training programmes as a means to reducing the capacity deficit that some of these companies cite to justify their requests for expatriates. This is an ongoing effort. We believe that Nigeria has the potential to export oilfield skills to other parts of the world, and reverse the so-called expatriate quota.
Many oil and gas operating and servicing companies continue to send their staff overseas for routine trainings. Is this an indictment on the capacity of your members to provide these trainings?
It is an indictment on Nigeria as a country. Take, for example, a Nigerian company with a Nigerian instructor going to Dubai to train. Is that a foreign training or indictment of our members? No! Many workers prefer overseas training because of the estacode and shopping and not because of any additional training they will get. If the companies feel strongly about the extra knowledge to be acquired overseas, let them bring the resource persons to Nigeria and let more people participate. Our members have eminently qualified trainers with long years of industry practice in their respective domains. Many of them have international affiliations, where necessary, with courses that are certified or accredited. People continue to be sent abroad because employees see this as an opportunity to travel and so they intensify pressure on employers for this purpose. Our regulatory framework has to be strengthened to monitor this act. Someone came for training in our office and recalled that he attended a similar training course in London with a foreign trainer. He confessed that he could not hear 60 per cent of what the instructor was saying, not to talk of understanding and benefiting from the course. And most of the examples used during the course had nothing to do with the Niger Delta basin, which relates more to where he works. I appeal to the NNPC management to encourage the domestication of training in country. As the leading partner on behalf of government in the oil and gas sector, they should lead by example. Many oil companies also want to patronise and develop training institutions in their home countries. There should be a deliberate policy by government and particularly through NCDMB to ensure a balance. This is why OGTAN, on its part, is working with all stakeholders on the categorisation of members to ensure we are able to identify well established training institutions and give room for others to grow as well as meet international standards. I believe that this will be a win-win strategy for the industry. But we still have room for improvement and growth.
What is the possibility of OGTAN members forming a consortium to establish training centres of excellence?
This can be achieved 100 per cent and that is the way to grow. OGTAN has always encouraged our members to collaborate and form alliances that will enable them punch higher than their individual weights. This is ongoing, and I believe that in no distant future, some of these synergies will culminate in training centres of excellence. Government, through NCDMB, can also encourage and support these synergies.
What are the biggest challenges facing members of the oil and gas trainers association in their operations?
One major challenge is the perceived notion that anything local or Nigerian is not good enough, coupled with the attitude of Nigerians for foreign trainings for personal gains in preference for patronage and development of local capacities and capabilities. This has denied our members huge patronage and the necessary inflow for growth and development. So, the biggest challenge facing our members is how to get enough training projects to keep our businesses running even when the necessary infrastructure is in place. Funding is also a major challenge that has impeded the tooling, training and development of world-class trainers in-country, though there are now plans to inject funds through the NCDMB/ BoI (Bank of Industry) initiative. Also, you know that our industry has been very challenged in recent years, for reasons that are global and local. When a situation like recession arises, and contrary to what happens in advanced economies, the training budget is the first to go and the last to be reinstated when there is a boom. Another concern is the omission or lack of recognition of training as a potent and vital tool in regulations. Even the NOGICD Act features Education and Training in a broad term but is void of specifics. The focus of the Act is on companies in the purview of skills delivery. Training organisations are secondary and thus must be subordinate to contractors’ considerations to get practice opportunities. For example, if the Education and Training Sectoral Working Group is valued appropriately, it should have been in the core of the business of PTDF, NCDMB and, therefore, have a seat on their Council and Board, as the case maybe. But this is not the case. Other serious challenges are non-availability of accreditation services, which may not be accepted in the international market, enforcing the Nigerian Content Act across board and ensuring the standard operating model is adopted by all OGTAN members.
There has been a proliferation of oil and gas training companies. What mechanism is OGTAN adopting to ensure standards in the practice?
Apparently, some gold diggers now parade themselves as oil and gas train ers, and some of them profit at the expense of bonafide OGTAN members. But with the categorisation coming, and with the cooperation of operators and service companies, sanity and transparency will prevail, and quality training will triumph. Also, the weak will be strengthened and the strong will be better positioned in a fair and transparent manner, using independent auditors. In the past and now, OGTAN has played several roles either as a validation centre, watchdog or empowerment hub. No one can offer training or capacity development interventions to any oil and gas outfit without being a registered member of the association. You won’t be registered until you have been validated. After your validation, certificates will be given to you to operate within the oil and gas space. This certificate is renewable. Outfits within the oil and gas space are also informed about the requirements to demand for when trainers tender their bids or proposals. Many foreign trainers neither pay tax nor register in this country but cart away a lot of dollars from our country. Categorisation will surely help in this circumstance.
A number of oil and gas service companies have floated training subsidiaries. Is OGTAN pleased with this development?
For OGTAN, this is a welcome development. Every legal entity is entitled to invest where they will, within the law. And if they have so done, we cannot fight them. Rather, we will expect them to work with OGTAN to strengthen capacity building in the industry. Where they don’t do this, then we will be forced to seek appropriate interventions. Secondly, they need to meet the dictates of the NOGOS and internationally accepted best practices. If these are met, OGTAN has no fear in a competitive market. We believe that service companies will be good trainers because their training will be based on field experience. However, we need to watch abuse.
What support does OGTAN need from relevant agencies of the Federal Government so members can realise their potential?
I thank the management and staff of some agencies – NCDMB, PTDF, PTI, NUC – for the support we have received so far. NCDMB, in particular, has welcomed OGTAN as a partner in progress for capacity building in the Oil and Gas industry. We will continue to work with them to strengthen enforcement of relevant policies and the pursuit of consultation, collaboration and cooperation, such that our initiatives are aligned for maximum synergy. OGTAN will be very delighted to receive the support of NCDMB in the categorisation of our members. This will certainly help in building the confidence of IOCs and other stakeholders in the patronage of our members.
The price of crude oil has recovered substantially after going through a major slump. How has this impacted the operations of your members?
We are still not fully out of the woods. Many companies are still treading with caution, such that they are still staying operationally lean and tightly streamlined. In effect, we are happy at the recovery, but it is not yet Uhuru. But our members recognise the peculiarities of the times and are always working to bring more innovative and targeted training interventions to our customers, as partners for the long term. With the recent slow recovery, yes, I agree, the training and capacity development of employees have started picking up, but everyone is still very cautious.
How has the implementation of the Nigerian Content Act impacted patronage of your members’ services?
The Nigerian Content Act is one of the best things to have happened to our industry. Improvements are still needed, but the Act practically created the oil and gas training industry as it is today. Ten years ago, there were very few indigenous trainers doing very little, but that has greatly changed today. The implementation of the law has been acclaimed to have attracted investments valued at $5 billion into the country and created about 38,000 job opportunities. This also created opportunities for our members to be more involved in providing content. Some of our members were saddled with the responsibility of managing various compliance issues that arise from the implementation of Nigerian Content initiatives in their companies. It has been quite impactful as it has resulted in the growth of our membership.
Crude oil prices plunged from a peak of $115 per barrel in 2014 to as low as $27 in 2016. How significant was the impact of the decline on employment in the Nigerian oil and gas industry?
Of course, it did affect so many companies. I can tell you that many companies tried to lower their costs. But there are lessons that we have learnt that will be good for us. There are some things we took for granted but we found out that when the low oil price came, there were hard lessons that we learnt. The slump made us to be more prudent in the management of our resources. And I think even coming out of the low oil price regime, these lessons are still very useful for us. If we employ the things that made us survive the low oil price regime now that we have increased oil price, we will blossom more. Now, I think those lessons are with us and we cannot do without them.
With oil price hovering around $78 per barrel, do you think there will be increased employment by oil companies?
Quite a lot of things will improve now. During the low oil price environment, the first thing people cut off was training. Now, we are seeing an improved training opportunity; things are changing. When you have a low oil price regime, there are things that have to go first. All you need to do is to maximise and optimise your production. So, many companies at that time were not thinking of training and exploration activity. The oil rig count came down drastically. But the oil rig count is over 20 in Nigeria right now. There is hope now that quite a lot of activities will improve and we will attempt to also improve our reserves base and make attempt at more exploration activities. These will lead to more employment. A lot of people will be hired; companies will now have the capacity to carry out some of the projects hey abandoned.