Human Capital Development, Local Content And The Future Of The Oil And Gas Industry

Ademola Ogunbanjo is the General Manager, Business Support Group, Oando Plc.

He speaks with Chris Paul Otaigbe on the intrinsic power of the human mind how it affects every aspect of all that we do.

That is why the development of Human capital is key to achievement and
the accomplishment of any goal, be it in the economy or politics.

Applying it to the Local Content Policy of the Nigeria Oil and Gas industry, Demola bares his thoughts as a professional Human Resource specialist on the inherent strength of the mind of the Nigerian over technology and its application to solving the problem of the country, especially from the perspective of human capital development, local content and the future of the oil and gas industry.

He says the integrity of technology is driven solely by the integrity of the human mind, going by the ‘GIGO’ principle.

Here are excerpts:

Nine years down the line, since its creation, what is your take of the Local Content Development in the Nigeria Oil and Gas industry

Ademola: We have done better than where we used to be. Human capital development continues to be a challenge. But we are not where we used to be. There are more efforts now around Training, capacity building, Skills Acquisition, especially for Locals in the Oil and Gas industry. When I say Locals, I mean Nigerians. We have seen to it now that even at the vocational, Technical Field operations level, where we used to get underwater welders, from Germany, Philippines, South Africa, we are training our people to take advantage of those positions now.

As you know, the policy says it is only when we do not have Nigerians who are skilled in delivering a service that you are allowed to bring a foreigner. Even that foreigner has to be understudied within a time limit so that the Nigerian is skilled to take over from that foreigner. That is what we have mainly seen across the industry. So, I would say we are moving in the right direction.

How have these nine years impacted you personally?

First, I would say it speaks to the challenge we historically had with accessing skilled manpower, which are Nigerians within the industry. It has been difficult over time. Over the last nine years, it has been much easier. Don’t forget the Amnesty Program, that Was instituted by the Late Umaru Yar’Adiua Administration, the Amnesty for the Niger Delta people, there has been a lot of training around ‘drop your weapon, acquire employable skills and those skills are largely Oil and Gas based.

We also take into consideration the economic downturn, in 2009, we had the impact on the industry, the lull that we faced in the industry, there were certain companies that let go of some people, again it increased the pool of skilled manpower within the industry that organizations could then reach out to.

As a person, reviewing the last nine years regarding human capital development and supply, I would say we are doing better than it used to be.

How much of ‘First consideration’ as stipulated in the Nigerian Content Act, is given to Nigerians in the industry?

The interesting thing is, it is easy to read out the Provisions of the Act, review the industry and then say, are we sure we are doing well at all? But we must recognize that when you speak to giving first consideration to providing materials manufactured locally, you must then look at our manufacturing capacity as a whole. So, we must discuss this in context.

We must also recognize that there are levels of infrastructure requirements that we must provide as a nation for manufacturing to blossom as well. There is power; there is a road, rail… it is not like we are not gaining meaningful mileage from those sectors as we speak; it takes a while.

You find that a local manufacturer who is using the Nigerians content policy to approach an IOC and say, you should give me this contract… but the bottom line is that when you are appraising them, you find out that their technical capacity is based on a relationship that they have with a foreign technical partner.

So, most of the manufacturing is still done outside of Nigeria. If that continues, what you would find would be portfolio organizations that are leaning on the Local content policy to get a contract but not build Local capacity. But then again, we, also, cannot judge them out of context.

We must also look at the business environment and policies around industrialization, enterprise creation locally, infrastructure, power…

Are you saying that that provision, by your submission, may have created some lacuna that may then be used as a loophole and leveraged upon by unscrupulous contractors, etc……?

What I am saying to you is not alien to anyone in the industry. It is not some lacuna. It is just a gap that’s been identified and so that ill-intentioned people do not leverage on it, taking advantage of the provision of the Nigerian content. We are closing those gaps. Slowly, we are now seeing organizations moving plants into Nigeria to build capacity, supply locally, they have challenges, no doubt. It is expensive to run your factory on diesel-powered generators. But it would be cheaper if you have a power supply from the grid. It is reliable, and people can plan.

You must also consider the security challenges we are currently facing across the country. We have our security challenges in the South West, South-South…. Once upon a time, it was strictly South-South. Now we have South West, North East, Middle Belt. There is also the one in the North West, upper North. The invasions and the incursions we have seen from all these Bandits and so on.
So, setting up something in Nigeria, takes one, faith in the system, a genuine love for the country and the people of the country.
No matter how you look at it, you have to look at Oando and duff your hat. We have stayed the course, and we have proven that the development of Nigeria as a country, the people of Nigeria and their economic aspirations are critical to us.

We could have moved our business anywhere else. But we are committed to Nigeria. We will continue to deepen enterprise in Nigeria. Whatever challenges there may be in the business environment, we will surmount it together. As an indigenous, we are number one.

Especially when you consider what we have done in the downstream sector? What have we done in the midstream sector? Gas and Power…what we are doing, now, in the Upstream sector.

What is Oando’s core vision for Local Content development?

When you look at human capital development in the context of the industry, we have a recruitment philosophy. Our recruitment philosophy mirrors the philosophy of the Nigerian content policy. When we have a role to fill, we look first for Nigerians in Nigeria, who are qualified to play the role. If we do not find them, we look for Nigerians in the diaspora, who are able to fill the role. And if we find, we repatriate such, and we have done it many times.

What is the percentage of Nigerians in your employ?

You should be asking me the percentage of foreigners in my employ, and it is probably one percent expatriates. All my people are Nigerians, and we have brought about 30% of them back from the diaspora.

We have shown them the value they can come and engage locally. They saw it they came and some of them have been with us for about five years. So, that is our philosophy. When we cannot find a Nigerian that is qualified, that is available to be hired at that time; then we go for a foreigner.

We are not delusional…we are not one of those who believe that the word ‘Expat’ equals EXPERT! There are Expert Nigerians all over the world doing amazing things, and we recognize this. Where we bring in an Expat to fill in a role, we continue to look for a Nigerian that can take over from that Expat. And that is what we have done historically. We have brought in Experts at certain points to come and do certain things. Two years ago, my COO was a Greek gentleman. Today, my COO is from Edo State.
We recognize that training is required. Capacity development is a continuum. There is no end to it, and we must also feed the pipeline. So, rather than continue to shop for technically autonomous professionals, we must develop professionals as well. We must feed the industry not only for our sake but for the larger pool enhancement.

So, we launched very many years ago, the Oando Graduate Training Program. For that program, we get, sometimes, 40,000 applications, and we whittle it down to about eight-ten and hire the very best of them.

But you also need to look at the size and the rate of growth of the business, and you look to see… can you bring in ten young, core professionals every year? Based on our business journey, the answer is no. So, what we have found ourselves doing is we do it every other year. But we don’t want to do it every other year. We want to do it every year.

So, we have come to the place where we have said, rather than do it every other year, because of Oando only, why don’t we do it every year, we don’t have to retain them. We would train them; we would develop them. We would give them skills, and when they are done, we release them to the industry.
So, that all these people who release adverts and say, every job is minimum qualification is two years and so forth. If nobody is willing to hire first, where do you get a minimum of two years’ experience? We would cover that gap with the training program we are setting up now, which is the Oando Talent development program. It is different from Oando Graduate Trainee Program.

This is a Talent development program, and the agenda is to feed the human capital development pool within the industry. Any Oil and Gas company can feed off these guys.

The annual spending of the industry is about $20 billion. Before four years ago, we were begging to see if Nigerians can access even if it’s 0.1% of that pie. But today, we have over 25% of that spend. Did you think we could get here, and secondly, do you believe it is sustainable?

I have always believed we would get here. My view on life’s trajectory is always forward-moving. The Nigerian content policy and the set up of the Directorate and what we are looking to achieve with it is… it is almost a birthright for any resource-rich country. The fact that it has taken us a while to achieve what we have achieved, it is ok.

I have never been pregnant as a woman before. But I want to imagine that when a woman is carrying a baby, sometimes it would flash in her mind if that baby would be a girl or a boy, the day she would marry, whether she would be a doctor or engineer, the baby is still in the womb, but she is dreaming of the future of that baby. When the baby eventually comes out, she still has to carry the baby for a while, there is a period the baby would be a toddler, but it doesn’t mean that growth is not happening. And that is what we are seeing. We just need to be patient and recognize that real, sustainable growth takes time. But if we stay the course, we will achieve it, and from the sign, I am seeing, we would stay the course and achieve what we said we would achieve.

You did say, in one of your interviews, that technology enhances our way of life. And that there are fundamental issues beneath it. Considering the fact that technology is the prime driver of this highly capital-intensive industry, how do you mean?

I must have spoken in the context of… at the time if I remember quite well where I said technology enhances our way of life. Technology is not the key driver. This must have been an interview I granted on Arise TV, and the question was about vote-rigging, vote-buying and if card Reader would end it. I said the Card Reader technology is technology. It is going to bring us to ease. The ease is in the registration process. You just put your card and place your thumb on it. It reads it, and they show you where you are going to vote. It eases. It enhances our way of life. But technology still requires content.

There is still a human factor in the provision of content to drive technology, and the point I was making at the time is the people, themselves, need to make up their minds to deal with technology with integrity. You still have to bring integrity to the engagement of technology, because people can still bend technology, influence technology to do whatever it is they want to achieve.
If we are looking to solve the problem of vote-buying in the context of the conversation I was having, we shouldn’t rely solely on the fact that we have introduced technology, there people who would still work it.
We should extend our clean up, for lack of a better expression, we should extend our clean up to the orientation of the people.
In context, people use technology. People would bring content to technology. If that content is warped with lack of integrity and bad ideas, technology is ‘GIGO’- Garbage in, Garbage out.

You put integrity into technology; technology would give you integrity on the other side. But what technology would have done is that it would have made the process more efficient and effective. That’s the context I was speaking at the time.

To bring that to my industry: a lot of the things we do in the industry, also rests on the use of technology, whether it is subsurface studies where you do seismic data gathering and all that, there is the technology required in that. Whether it is drilling, whether exploratory or you are producing, it is all technology, and the people who drive thinking in those sub-sectors have the right fingers on the button. They are constantly iterating.

The processes, the systems, the technical application of what they continue to learn… we learn as we use. Then we identify gaps so we can iterate by filling those gaps. And, yes, there is a lot of leaning on technology to drive efficiency in producing our oil. You now know that in creating our oil, we don’t only have the usual drill that is vertical, we now have horizontal drilling technics that can now access hitherto difficult Reservoirs.

These things are based on improvement in technology and all of that. Again, it’s like life itself. It’s a journey, and it’s getting better every day.

Grace Ihesiulo

Grace is a prolific writer, a Broadcast journalist and a voice over specialist.