As the 2015 SPE NAICE comes up, may we know the profile of the society in Nigeria?
Society of Petroleum Engineers, Nigerian Council, is the Nigerian affiliate of the SPE International. This is a worldwide organization with about 125 000 paid members in 135 countries. Nigerian affiliate of the SPE was formed over 40 years ago. And over 40 years the SPE has been delivering its mission to support the development of technical manpower for the industry, provide the catalyst that support indigenous participation in the Nigerian oil and gas industry, encourage best practices, share best ideas and to partner with government, oil and gas producing and service companies on different initiatives to help move the industry forward.
We want to improve our reserves. We want to improve on our production capacity sustain growth for the benefits of all stakeholders. In all these efforts, our sustained engagement with stakeholders, notably during our major flagship events: the Oloibiri lecture Series which is a policy forum that usually holds in Abuja (OLEF) and the Nigeria Annual International Conference and Exhibition (NAICE). These two flagship have continued to add significant to the success of our objectives. We have been consistent with NAICE as a leading oil and gas technical conference. It is the largest in Sub-Saharan Africa. It provides leadership in the technical and professional development of engineers, operators, technicians and all those that have things to do with our oil and gas, particularly during this period of downturn in our industry.
This is the 39th edition in about 39 years since we have been holding NAICE. This year’s edition holds from tomorrow the 4th of August to Thursday the 6th of August 2015 at the Expo Center of Eko Hotel and Suites, Victoria Island Lagos. And the theme for this year’s conference is “Natural Gas Development and Exploitation in an Emerging Economy – Strategies, Infrastructure and Policy Framework”.
The main focus of the theme is “Sustainability, Infrastructure and Framework in an emerging economy.” The focus is on natural gas development for a number of very important reasons. And the key sessions of the conference include Marginal Field Workshop on Nigeria Gas Monetization and Infrastructural Development; Indigenous participation in the value chain We gonna have a Panel Session of experts to talk about the Oil & Gas Global Demand, Supply and Trend in Prices: Implications for Nigeria. We gonna have a second Panel Session which is on Natural Gas Supply Gaps – Can the Regulatory framework alone solve the Problem?
We also gonna have Young Professionals Workshop which explores the 3P’s; that is Principles, Perspectives and Participation in transforming a young professional into an Entrepreneur for the Oil and Gas Industry” And of course, without leaving out the women, we have a Women Professionals Development Program wich is going to focus on “Global Oil Price Trend; Lessons From The Past And Insights Into The Future – Perspective of Women Leaders,” The 2015 NAICE will provide unparalleled world-class opportunities for knowledge sharing, capacity building, networking and marketing of products and technology.
The Opening Ceremony which will have top leaders and executives from Government, Industry and Academia present, and we have confirmed speakers to HE, Prof. Yemi Osibanjo, SAN, The Vice President , Federal Republic of Nigeria. We have HE, Mr. Akinwunmi Ambode, the executive governor of Lagos State. We have Dr. Joseph Thlama Dawha, Group Managing Director NNPC. We have Mr. Helge Hove Haldorsen, Vice President in charge Strategy & Portfolio Development & Production, North America, at Statoil. He is also the current worldwide President of Society of Petroleum Engineers. We have Mrs Elisabeth Proust who is the CEO, Total Exploration & Production, and happens to be the Chairperson for the OPTS in Nigeria. And we have Mr. Clay Neff Jr, the Chairman & Managing Director, Chevron Nigeria Limited. We have some other notable leaders and captains of industry who will be participating by video streaming and podcasts. The conference will also feature over 60 exhibiting companies from within and •Emeka Ene outside Sub-Saharan Africa.
Some of the Pre-conference activities include six short courses, young professionals’ workshop and team building activities, leadership workshop and others. All of these is to strengthen the capacity of the Nigerian oil industry. There is no other conference like this in the Nigerian technical sections. The marginal field workshop, women development program and YP workshop are all topical sessions that will feature high profile technocrats.
We have the SPE Faculty Task Force that brings professosr from different universities to come and interact and discuss research and development in practical sense. We have networking sessions for VIPs, industry excellence awards and dinners. All of these are opportunities for our families to participate. We provide a total opportunity for the industry to interact at the fundamental level: at all the levels of the industry to build and strengthen the oil and gas industry, particularly at this time when we are dealing with low oil prices and uncertain future for our industry. At the heart of the conference is the Technical Program.
This is a presentation of over 160 technical papers. These papers have been selected from a submission of over 400 full manuscripts, and they come from wide spectrum of endeavors, with the majority coming from the industry relative to the academia, and also papers submitted by industry professionals and academicians from across the world. As you know there is a contest that goes along with the programme. We have a peer review of these technical papers and select the best NAICE technical paper and the winner will have an award. And we begin to measure the depth of the technical papers feedback, the benefits and of course the impact they would have on our industry.
Over 2000 professionals will attend NAICE this year.
I need to mention that the Oloibiri Lecture Series and Energy Forum, OLEF 2015, was an important flagship event that marked our calendar this year. We discussed “Global Oil Price Dynamics: Impact and Strategic Solutions for Nigeria.” And this forum gave us the platform to bring together policy makers, bring together politicians, bring captains of the oil industry and professionals to look at the impact of the downward trend of global oil prices on our economy.
Beyond OLEF, I am pleased to announce to you that we successfully completed a ground breaking ceremony for the SPE Energy Centre. And this is a unique center that will include an oil and gas museum. It will include conference halls, meeting rooms, and learning centers. It includes a hotel.
It also includes a research and development institute for local content materials. It is being done in collaboration with Petroleum Technology Association of Nigeria (PETAN). I think this is a very unique collaboration because it is situated near the University of Port Harcourt which has so kindly provided almost one hectare of land. We have already commenced the project and we are quite expectant that most major oil and gas companies, service companies both national and international have already indicated their commitment to support this SPE initiative on behalf of the industry.
There the lasts technologies showcased by both the oil companies and the service companies will be on show within this Energy Center; and it will also allow interaction between the professionals and the academia in a direct manner. We expect that upon successful completion, we are going to replicate this project in many other universities as a way to cross fertilize technology ideas and best practices between the industry and the academia.
SPE agreed to collaborate with the Petroleum Training Institute Effurun to jointly organize drilling and production-testing simulation training and certification programs for engineers and technicians in our oil industry. They don’t have to travel to Aberdeen or to Houston to train and certify. Now this can be done with the support of SPE in collaboration with PTI right here in Nigeria.
Experts say the future of the Nigerian oil and gas industry depends on the indigenous oil service firms in providing efficient options to operations especially at this period of price adversity. You are the Chairman of both PETAN and SPE, how does that responsibility challenge you?
One thing that SPE stands for is knowledge and knowledge sharing. We have to understand and we appreciate that this industry is driven by technology, it is driven by knowhow, and in doing so by investments. There are no short cuts. So, knowledge is the key differentiator. If you look at the different phases of development in the oil and gas industry in Nigeria, they started from onshore basin to the shallow water and now to the deepwater. They have always been driven by technology, knowhow and investments.
It is with that in mind that SPE as the world’s largest organisation focused on oil and gas industry. And in Nigeria, SPE remains the largest oil industry focused organization and coupled with the oil service umbrella, PETAN, the combination and potential to unlock and apply relevant technologies to efficiently produce our oil becomes very germane. This industry is built on collaboration.
There is no single person, group or organisation that can claim to have it all. We have built the industry on collaboration, we have built an industry on shared practices, and we have built an industry on technology. As a result, the SPE Energy Center we talked about is to help bring together all the different components of that knowledge space in such a way they apply to real life problems, and they can be disseminated across out industry.
If you look at our industry what you will see in a way is the tendency for different solutions for the same problem depending on whom you are talking with. The SPE is a very good equalising forum that allows professionals to come together to challenge the problems and evolve solutions. The solutions that work are adopted. They are not held back. That peer interaction is so critical for sharing of knowledge and application of technology. Our expectation is that conferences like NAICE will be a very big platform in which knowledge sharing can take place.
What would point at as the key contributions of SPE to the growth of the industry in the past 40 years?
With all sense of modesty, I will not sound like the proverbial lizard that after falling from the iroko, nodded in appreciation of himself. So I think that SPE has contributed significantly to the knowledge part of the industry. We have been going for the past 40 years and you have to recognize that there has been any professional in the oil industry today who has not been directly and SPE member at some point in his career, or has known or worked with an SPE member.
Many of the CEOs of oil companies today or CEOs of oil service firms today are either SPE members or have SPE members working in their employ. So SPE is the connecting dot for the industry. Right from the drilling in the exploration phase to the development phase, SPE members have always significantly played a role. SPE has also been responsible for pushing and establishing certain policies. When you look at the policy on gas flare out, SPE led it.
The policy on unitization between fields, SPE was the leader in that space. When you look at the marginal field programme SPE has taken leadership in many aspects of making it work. In the downstream, when you look at the solving the challenges of refining, SPE has also played a major role in influencing that process.
Now the thing, and I can’t overemphasize it, is that for us to develop as an industry, what we don’t want is to have people reinvent the wheel. The SPE serves as very good disseminating platform by which we can attract the best practices wherever they exist globally and bring that to the table.
SPE has been responsible for developing oil and gas expertise all the way down to the grassroots. We have the catch-them-young programme where we begin to expose primary and secondary school children to the oil and gas industry. The SPE has been involved in spreading the best HSE practices right across the industry. The SPE in Nigeria has taken a position of leadership. And you will notice that every African regional director that SPE has had till date at the Africa Region is led by a Nigeria. This is a testament of the fact that the SPE Nigeria has been strong in supporting the oil and gas industry; not just that but developing beach heads on all the sides.
Given the political transition in the country and the likely effect on industry policies, what is SPE’s advice to the new government?
On the leadership of the management of the oil and gas industry, one thing I can say is that federal government takes a keen interest in the reform, restructuring, development and strengthening of the oil and gas industry. To give you some perspectives, it is not new that oil price is now half of what it used to be this same time last year. It has happened so fast that some people still have the old price even in their documentation.
The challenge we have is what do we do in this kind of scenario? If you contrast it with the Middle Kuwaiti oil industry is at all time high. The activity in the industry in UAE is at all time high. I understand they are gonna spend about $36 billion in their oil industry over the next three years. Now what that tells you is that they are building for future demand.
If oil price falls by half what do you do? You increase your production and be more competitive. So, in that respect, the resuscitation and growth of our industry is urgent because we have to catch up, we have to play hard and develop our industry fast in the light of halving the value of the product.
Increase the volume of product at a time when our production is falling, our reserves is falling and there appear to be no money in the bank. So it is a challenge. And that appears to be the reason why government rightly taken a keen interest in our industry. And every industry stakeholder recognizes that as an industry we have to pull together, restructure, remodel, and built a more efficient industry in order to compete among other industries in the scramble for more market in a low price regime.
Given the prevailing market turgidity which actually watered down prices where will additional production find profitable value?
This question brings to bear the reason why SPE is well positioned to provide direction for the industry. We have not spent 39 years in oil price boom. Every seasoned oil professional recognises that oil price is in a cycle. It may be up and it may be down. We were here when oil price was $9 per barrel. It is roughly a 10 year cycle. You have a dip, it goes up and then it comes down. So, what happens is when it is down cycle you prepare for the next up cycle.
So it is time for drilling more wells, that is, in the down cycle, because it is cheaper to drill more wells during down cycle. When it gets into an up cycle you start to benefit from your investment in the down cycle. Drilling in the up cycle is gonna be too expensive and before you know it, it slides to the down cycle again.
So that is the mindset you’ve got to have. It is not a panic mindset. It has to be a mindset of looking long term: strategic mindset. And that is what the SPE does by giving us a strategic view. Number one is that there is a discussion ongoing among all SPE members across the globe, so that you know what is happening in Dubai, Middle East, South East Asia, China, North America and North Sea. Therefore you know the trends and that will bring the experience to the table on how to deal with our industry. So the time to invest is now not when the price has gone up.