Within three years of his appointment, Wabote has brought his project management skills into the rapid construction of a 17-storey headquarters for the board, comprising 1,000-seater auditorium, and multi-level car park. He has also developed a 10-year roadmap to grow the Nigerian Content to 70 percent by 2027. He spearheaded the commencement of the construction of the Nigerian Oil and Gas Park in Odukpani, Cross Rivers State and Emeyal-1, Bayelsa State and the launch of the $200m Nigerian Content Intervention Fund to provide low cost and accessible credit to service companies.
Wabote has also reinvigorated the operations of the NCDMB by pioneering the development and deployment of the Service Level Agreements between the Board and the Nigeria LNG, Oil Producers Trade Section and Indigenous Petroleum Producers Group, which has reduced the tendering cycle time to six months and fast tracks the development of new projects.
With his prudent and disciplined management of resources, NCDMB under Wabote’s leadership has catalysed the successful integration of one of the largest Floating Production Storage and Offloading, FPSO, in-country at the SHI-MCI yard in the LADOL Free Trade Zone and facilitated in-country integration of six modules on the Egina FPSO, the first time in the entire Gulf of Guinea. He also introduced key signature events into the oil and gas industry calendar such as the bi-annual Nigerian Oil and Gas Opportunity Fair, NOGOF, and the Nigerian Research and Development Fair, R&D Fair, to showcase the oil industry’s opportunities for investment and galvanize research capabilities, respectively. He has also used the annual Practical Nigeria Content conference and exhibition to set agenda for the industry.
Wabote has championed NCDMB’s equity investment in Waltersmith’s modular refinery and other strategic capacity development initiatives in the hydrocarbon value-chain in line with the board’s vision to serve as a catalyst for the industrialisation of the Nigerian oil and gas sector.
Prior to his appointment as executive secretary of NCDMB, Wabote was an executive director of Shell Petroleum Development Company, SPDC, Nigeria Limited, and general manager, business and government relations for Shell Companies in Nigeria, SCiN. He joined Shell in September 1991 as an oil and gas engineer after a short stint with the banking industry. He served the oil company in various senior positions within Nigeria and in several countries across Africa, Europe, North America, Middle East, Asia and new frontier countries in engineering, local content development, contracting and procurement, government relations, and community affairs.
Wabote holds an MSc from Leeds Metropolitan University and is a graduate of Civil Engineering from Rivers State University of Science and Technology, Port Harcourt, as well as a graduate of INSEAD Group Leadership Programme. He has very sound technical and business competencies with proficient skills in Engineering, project management, local content strategic development, human capacity building, government relations, and stakeholder management. A Fellow of the Nigerian Society of Engineers, he is also a COREN registered engineer and a member Institute of Civil Engineers, London.
Wabote made time out of his busy schedule to grant an exclusive interview to the Realnews team of Maureen Chigbo, editor and Anayo Ezugwu, senior staff writer, in his office in Lagos, on Wednesday, February 26, where he discussed many topical issues in the oil and gas sector in Nigeria. He also shared what the NCDMB is doing to advance local content development beyond the shores of this country. He elaborated on how the board is using its intervention funds to build the capacity of indigenous contractors in the sector and what he thinks about the Single Treasury Account policy of the federal government. It is a must-read. Excerpts:
Question: Once again thanks for making out time from your busy schedule to grant us this interview. Let us start with your recent call for collaboration to host local content development in the oil and gas sector by African countries during the Sub-Saharan Africa International Petroleum Exhibition and Conference, SAIPEC, conference. What is the situation right now?
Wabote: The collaboration among African countries in terms of local content development is ongoing as we speak. A lot of Nigerian capacities have been established working outside the shores of Nigeria at the moment in places like Uganda, Senegal and Kenya in terms of providing services, particularly in the seismic interpretation and feasibility studies.
Nigerian companies have ventured into those areas since the discovery of oil and gas in most of those countries, including Ghana. Also in terms of providing some vital services, for instance, chopper services, helicopter services. Today, Caverton, which is a company that started in Nigeria, is providing services to companies in Ghana. So that effort to penetrate has been ongoing. But is it getting the desired traction? The answer is no. The idea now is to fashion how to continue to create a platform for this discourse to demonstrate the existing capacities and to see how we get African countries to realize that all of these services that they desire in the oil and gas industry can be gotten from sister countries, which of course brings down the cost of execution. With the African Free Trade Agreement, it provides a variable tool to share those services and reduce cost of activities in the oil and gas sector. Presently, we recorded some successes, but I think we could do more. I think with information and people realising that next door the capacity does exist, potentially a lot of activities are expected to happen in that sector.
Question: You said we could do more. Do more in which aspect?
Wabote: There are a lot of areas. The oil and gas sector is very extensive, direct and auxiliary services from drilling, fabrications to catering activities, logistics, legal, financial services. There is a lot to be done in the oil and gas industry. So, have we been able to tap those opportunities?
The answer is no and that is what I mean that we could do more because we have not scratched the surface in terms of regional collaboration and country to country collaboration in oil and gas.
Question: During the SAIPEC conference, the Total Managing Director said that we have about $160 billion being spent in oil and gas and Nigeria has just about $16 billion. How is this affecting the development of local content in Nigeria if we are having such very low inflow of investment into the sector?
Wabote: Technically, if you even take that statistics and dissect it, it is not a bad number to come into Nigeria because you recalled when I made my presentation, I showed you the map of countries that were in oil and gas bearing 10 years ago and countries that are now oil and gas bearing. It is quite diverse. It is quite a lot. Today in the map of oil and gas, we are talking about Senegal, Cote d’Ivoire, Ghana, Kenya, Tanzania, Mozambique and these are countries that never had oil and gas. In those days, 10 years ago, the direct investment into oil and gas were coming into those countries that had oil and gas, Nigeria, Gabon, Algeria and the rest of them. But today that money is being shared to other countries. So the statistics itself is not bad to have $16 billion out of that is not a bad number giving that other countries have been able to discover oil and gas. My position with what Total MD said is different because if you go to the numbers themselves and you look at that snapshot of that window and then look at what we are getting, I’m sure we are getting a lot more than other countries in Africa.
Question: Giving that we are 9th in oil production in the world, do you still consider what Nigeria is getting is okay when you compare it with what other African countries are also getting?
Wabote: I think I consider it extremely good because one thing you must realize is that other countries that are now discovering oil will relax all their fiscal regimes and regulations because they want them to come. So they will go there if those things are a lot more liberal. But we have maintained ours, having been in production for almost 56 years, we have maintained some of the regulatory requirements as well as the fiscals and they are still able to bring in funds to the country, so I think that in itself is remarkable.
Question: So it is not a source of worry for Nigeria?
Wabote: No I don’t think it is a source of concern.
Question: If it is not a source of concern, why are the IOCs talking about it?
Wabote: Because they are talking about it from their own perspective. They are talking about it because they want you to remain where you were 20 years ago in terms of fiscal regime and regulatory framework. Don’t forget that the IOCs are strictly business concern and they do everything to maximize profit. So if they can leave you where you are 20 years ago, they will leave you there so that they will increase shareholders return. So it is business. No businessman will sit down and see his take being eroded without bringing out figures, statistics and concerns to close down your take because their home countries would ask five years ago, we made $5 billion profit from Nigeria as an example. Last year, it was $1 billion, what is going on? So they have to work to be able to show that we are trying to influence government policies, regulations so that our profit margin will remain the same in that country.
Question: So what is the broad picture when you look at their compliant and all the statistics they have presented to show that it has taken Nigeria almost 16 years to pass the PIB?
Wabote: Like I said, it is a business. So if they can do anything to keep you where you are to continue to maximize profit, they will do it. But for us again it is to say that now that there are other players that have come into the market, how do we sustain our market share as a country?
So no doubt that we also need to take into cognizance the existence of other players and the possibility of capital moving into those areas to tweak and adjust some of our regulatory regimes and fiscal policies in order to retain them or to bring them. Don’t forget that they are comfortable in Nigeria because now they know the system. The level of uncertainty of our geology is limited as compared to new frontiers. So they will rather like to stay with what they know than the unknown. It is only in extreme circumstance when they see that things are very tough and their margins are not increasing, they can say okay let’s take a plunge into those areas that we don’t know. I think that is what the government is also looking at this point. Since we now have other players and capital can move anywhere, what we can tweak and what we can adjust in order to retain our partners and to bring in more investments. So it is a continuous struggle. It is not something that will remain where it is. We will continue to review it as we go, especially with latest technologies now like shale gas, shale oil everywhere. These were things that didn’t exist about 10 to 15 years ago. So it behooves on us to look at what we have and make adjustment in order to retain our market share in the business. So I agree the petroleum industry bill is taking quite some time, but I can assure you that all hands are on deck to see that this year that the bill is passed to end the level of uncertainty that we have in the industry.
Question: What time do you think it will be passed? Do you have any idea?
Wabote: I think the minister in the last Nigeria International Petroleum Summit gave an indication that before the end of this year, the PIB will be passed by this current administration.
Question: Who is suffering more as a result of non-passage of the PIB, Nigeria or the IOCs?
Wabote: I think it is both ways. The IOCs are not Father Christmas. The IOCs are here to make money. Nigeria is also here to benefit from the proceeds of oil. So it is a two-way street. We probably are losing, they are also losing because of the level of uncertainty that it creates. It is a mutual arrangement if you know what I mean. It is not that Nigeria suffers more, they also suffers more because most of them have to write down some of their reserves globally because of some of the challenges they face in oil and gas sector. I think it was only last quarter that Chevron has to write down some of their reserves in order to balance their books. So it is a two-way street.
Question: You talked about latest technology, how is it driving the local content development in the country?
Wabote: Of course, the oil and gas sector is highly technical and the technology doesn’t remain stagnant. It changes over time. And I think in terms of local content, most of the businesses that have established capacity also are aware of this and they try to make amends in order to meet the existing technology. It is only those who don’t make those amends that go out of business.
So technology will continue to evolve and in a very fast pace. As an example I used to tell people that today a typical FPSO like Egina FPSO has about 150 Body-On-Board, BOB, but in another 15 years time, that whole facility will not have any body because it will be remotely controlled. So that is how technology is evolving and people are aware of this and they are doing everything to catch-up. But are we able to adapt to technology as fast as it is growing, the answer is probably no because I don’t think as a country we are investing heavily on research and development. Because we are not doing that we will continue to do catch-up.
Nobody is going to transfer technology to you, it is never done. Transfer of technology is a myth as far as I am concerned, but adaptation of technology is a possibility. But if you don’t invest in research and development in this sector, then you will continue to play second fiddle and I don’t think as a country, we have paid great attention to research and development in the oil and gas sector. But NCDMB itself is trying to pick up that pace in terms of research and development. We have just developed a 10-year strategic roadmap for research and development, R&D, in the industry. We have set-up an R&D council and we are trying to create research and development fund that will be available to researchers in order for us to enhance that area because if you don’t do that we will continue to be on the back burner in terms of technology. The other bit again is that if you Google and look at annual spending in each country on research and development, there is no African country on that list apart from South Africa that spent 0.02 percent of its GDP on research and development. No other African country. Little wonder we are still third world country because we are not really investing in R&D.
Question: Is there anything you are doing to push government to realize the essence of this in the years you have been working as executive secretary of NCDMB?
Wabote: When you talk about government, NCDMB is also part of government. So what we are doing is also what the government is doing and all we need to do is to advocate more for most of these activities and see how we can extend it to most of the sectors in terms of focusing on research and development.
Question: You talked about funding and there is this Nigerian Content Intervention Fund, how far has it gone to help development in the sector and how many people have benefitted?
Wabote: Tremendously. Like you know we launched the $200 million intervention fund with the Bank of Industry. Today, I can safely tell you that almost 85 percent of that fund has been accessed by Nigerian companies unlike most funds you don’t see people accessing them. That fund has about five products: equipment financing, contract financing, manufacturing, loan refinancing and community contractor refinancing. And it’s been a tremendous success. It has enabled most Nigerian companies to refinance their loans because we have fixed 8 percent interest rate. We also have five years period to pay back and one year moratorium. It’s been very successful working with the Bank of Industry.
Question: How many companies have benefitted from this fund?
Wabote: I think we have about 20 companies that have really accessed and benefitted from it.
Question: They implemented projects with it?
Question: Have they been able to pay back?
Wabote: It is five-year loan, so they will be paying bank constantly.
Question: Are you monitoring the projects they are using the funds for?
Wabote: Absolutely. We have a monitoring team that goes around to see how … but most of it is primarily loan refinancing. We know those assets which they have bought and are refinancing.
Question: Can you give u some companies that have benefitted?
Wabote: I don’t know if that is possible. But you can get that from the Bank of Industry because most of these companies are in public domain. They should be able to give the names.
Question: How did the idea come, you originated it?
Wabote: Yes I did.
Question: How did the idea come?
Wabote: If you look at the Act that is setting up the NCDMB, it says that one percent, which is contributed by the contractors, is set aside for building the capacity of Nigerians. And one of the greatest challenge Nigerian businesses face is access to funds because like you very well know, when you go to the banks, they will be offering their loans on 23 to 24 percent interest rate. And then the foreign counterparts get loans at single digits, so it is difficult to compete with them if you are getting at double digits and high interest rates, while others are getting next to nothing. You cannot compete with them in terms of price. So the only way to help the Nigerian vendors is to introduce this fund, which they are contributing to. Mind you it is not government grant, it is contributed by the contractors because the law says one percent of every contract awarded in the oil and gas industry should be paid to NCDMB. So it is not a government grant. It is meant to develop their capacity and that is what we are deploying the funds for.
Question: With this fund, do you think indigenous operators can now handle major projects in the industry?
Wabote: Even before the funds, Nigerian companies have really developed their capacity and are doing heavy duty projects. For example, before the advent of the law itself, all fabrication works were done outside the country. But between now and then, like you know this year is the 10th anniversary of the establishments of the board, Nigerian companies are now fabricating 60,000 metric tonnes. That is quite substantial and today we are able to integrate FPSO in-country, we are able to manufacture all the cables we use in the oil and gas sector, we are able to manufacture pipes and there have been tremendous achievements in terms of heavy duty activities. The first integration facility in Africa was done here in Nigeria. And we integrated the largest FPSO in the world that is producing 200,000 barrels per day. So that is a huge achievement and it is heavy lift and we have been able to do that. The fund in itself is just galvanizing that process the more, but in terms of capacity, we have built substantial capacity.
Question: Do you have statistics on the capacity you have built in the sector so far?
Wabote: Of Course. It is available everywhere. Today, 75 percent of the contracts are awarded to Nigerian companies. Today, we have been able to fabricate, for instance, in the Egina FPSO, 70 percent of local content was done in-country. These are very clear statistics for everybody to see.
In terms of human capacity development, most of the indigenous operators companies are owned 100 percent by Nigerians. If you go today to a company like the NLNG, 95 percent of the staff in that organization are Nigerians. You go to Shell the same statistics. So it is everywhere for everybody to see. It’s been a phenomenal success in the oil and gas sector and in terms of local content.
Question: Talking of success story, it is good that NCDMB has been on for a decade and you have built a headquarters for the board. Did you conceive it or was it on before you assumed office?
Wabote: The headquarters was on. I think when I came on board they just finished the foundation in 2016 November, when I took over. Between that period and now, it is a short period to complete a 17-storey building.
Question: That is what we are asking, but you did?
Wabote: You know the antecedent of Nigerians in terms of project completion. Some projects have stayed for 15 years, NPDC headquarters in Benin is an example. But between 2016 and 2019 we completed the NCDMB headquarters.
Question: How did you manage to complete the building, is it because you have been in the private sector that you are now bringing that experience to bear in making sure that once a project is started, it has to be finished?
Wabote: That is one of it. There is the private sector experience that we brought to bear. Secondly, I’m a project engineer; that is my background and I have been known for starting and executing projects. Just for your information, I built the Osubi Airport in Warri, which was built by Shell.
It was my project. I was the project manager there and I delivered it. At some point, it was the best airport in Nigeria that we built. As an engineer, I get excitement by starting and finishing things. So the private sector, to a large extent, contributed 80 percent of that thinking. And then the other thing is selflessness to be sure that you want to deliver things and that you don’t want to walk away haphazardly. Every activity that I get involved in like a project, we must deliver it. I have this knack for perfection and to get things done. Is that drive and desire to see result that drove us to ensure that the project was completed. Like you know, it is the tallest building in the south-south and southeast put together. We have a 1000-seater auditorium, which I think perhaps is the best auditorium in this country that is owned by government. We also have a four-storey car park. That project is thinking ahead in places like Bayelsa, where you never thought such project could come alive and having a car park built. So we are ahead of our time in terms of our thought process on that project. By the grace of God, it is something one looks back and be happy with.
Question: Congratulations. But the project, the 17-storey building, will it be fully utilized? Are you going to rent some of the floors out?
Wabote: We intend to get tenants and like I said, we are ahead of our time. I believe personally that for you to be able to get companies to come to the state, you must create conducive environment.
You must put infrastructure on ground. You can’t force it to happen. I believe with that head office, if we are able to also enhance accommodation in and around the place and also hotels, we will be able to attract indigenous and international players to come and become part of our tenants. And on the back of that, we built a 10 megawatts power plant, gas-fired power plant. So we are guaranteed 24/7 electricity. That is also ready and waiting for inauguration. So it is end to end thinking.
Question: When is it going to be inaugurated?
Wabote: We thought it could have been on February 14, but due to political crisis in Bayelsa State, it was postponed. So we are hoping that in April, we will do the inauguration because that will mark the 10th year of NCDMB.
Question; What are the programmes lined up to mark this 10-year anniversary?
Wabote: We are working. We have set-up a committee that is working and we hope to roll out the programme very soon as soon as the committee is ready to talk about it. But we are working very hard to see that we celebrate 10 years of achievement. You may say a decade, the word decade sounds a very long time, but strictly speaking, it is by the corner. If you don’t plan and you don’t do things, you can’t measure your achievements. But when you pronounce a decade, it looks like eternality. It is just 10 years.
Question: What will you say is the most important thing you have achieved apart from finishing this beautiful edifice?
Wabote: A lot. We have trained a lot of Nigerians in terms of manpower development using our human capital development programmes. We have worked with secondary schools to set-up ICT centres across the country because we believe that technology and ICT is the next big gold. So we have done that. We are also building industrial parks to incubate manufacturing activities. At least, two of them are actively ongoing in Cross River State as well as in Bayelsa State.
It is a huge achievement and we hope to complete that by 2021. And as a project person, my desire is to get it done and done properly. We also got involved in the training of science teachers knowing full well the dwindling fortune in STEM education. We have trained about 1000 teachers, enhancing their capacity to be able to teach the pupils. In addition to that, we have also built one or two vocational centres and enhanced existing vocational centres to be able to enhance our vocational skills. In terms of the marine sector, we have been able to raise Nigerians participation and ownership of marine vessels from zero to 40 percent within this specific period of time. Of course, I talked about the funds, which we started disbursing to Nigerian companies, not free, they contributed to the funds. That in itself is also a huge achievement. We have done quite a lot and today the discuss out there is how do we extend the local content to other sectors. That shows you that people see what we have done in terms of progressing local content.
Question: If we extend local content to other sectors does that mean we have to establish other boards to manage them or is it going to be domiciled within the board?
Wabote: I don’t know. But I don’t think that will be a good idea for you to begin to proliferate boards to implement local content. I think that will make it look like a joke. But I think that there are options that the legislatures are looking at. Of course, the executive orders are there to drive local content. So how do you put a legislation allowing those executive orders to ensure that ministries and parastatals also respect the need for local content? I don’t think proliferating the boards will be a good idea neither do I also think that you have to bring everybody under one board because the peculiarities of oil and gas industry are different from other sectors of the economy. I think something is being worked out, we are yet to see and as at when we see it, we will make our own input.
Question: And you achieved so much, built the headquarters when there was economic downturn and the revenue flow to the country declined. So how did you raise the fund, did you borrow?
Wabote: NCDMB has not borrowed a penny from anybody. We have not even taken an overdraft.
Question: How did you raise the funds?
Wabote: Like I said one percent was being paid by the contractors and we believe in prudent management and we believe in setting up budgets that we have money to spend. It is that kind of process and prudent management of resources that you need to push your agenda even in the face of dwindling resources. You don’t over commit, you don’t budget what you don’t have and you remain disciplined. And one other achievement is that when I came in, we have to exit appropriation because we are having this fund at the same time going to government for appropriation and I said it doesn’t make sense. Why can’t we manage the funds that we have so that government will have enough money to face other sectors. So in 2017 we exited appropriation. So we don’t go to government for any subvention or appropriation.
Question: So government doesn’t give you any money?
Question: Because I know that when the board started they were relying heavily on NNPC?
Wabote: We stopped that. In 2017, I made sure that it stopped.
Question: You rely solely on one percent?
Wabote: Absolutely. Like I said. it is discipline and prudent management of resources. We are not owing anybody not even our contractors. We didn’t borrow any money or take any overdraft.
Question: And you are still lending through the intervention funds?
Wabote: Absolutely. Discipline and prudent fund management and not going to frivolous things that do not make sense and that’s what we have done.
Question: I’m just curious, you said you have exited government funding and every other thing since 2017. What was the state of the board when you came in, what did you inherit?
Wabote: Of course, the board had some funds out of the one percent from 2010 and 2011 they accumulated some of the funds. And thank God to the introduction of the Treasury Single Account, which I think is one of the great successes of this administration because there were so many leakages. People had no idea of how much funds they have and how much they spend.
So that helped us to consolidate and we knew where we are going and how much funds the board gets and how do we plan our programmes to remain within the funds that we have. It is just discipline and prudent management.
Question: In Nigeria when people takeover offices, we don’t want to talk about governors, they will complain that their predecessor destroyed everything. So when you came onboard what did you inherit?
Wabote: I think the board has been lucky in the sense that from the first executive secretary that ran the board for almost six years, was also an industry person that came in from NNPC. So that level of discipline was also there. There was no frivolous expenditure or white-elephant project that was embarked on. So I saw a system that was running, but needs to be improved on, that needs to be enhanced and that is where I came in to say how do we take it to the next level?
Based also on my philosophy in life that you don’t spend all your energy complaining about what is not right. You should spend your energy pursuing what is right and that is my philosophy. I didn’t meet anything that I felt I needed to start talking about. I met something I needed to enhance on.
Question: Where did you get your principles from, did you inherit it from your father or mother or something that you just develop along the line?
Wabote: I think I will give the credit to Shell. Like you know, I worked for Shell for 25 years and it is a company that has values, principles, processes and discipline. So majority of it apart from my own moral values, I also got it from Shell, which took greater part of my life as an adult. I give credit to that organization. They train their staff, imbibe values and as you said, I also have values as a young man growing up. And I have believes which my parents handed over to me, but that was really reinforced by the company I started working for.
Question: What are those beliefs your parents imbibed in you?
Wabote: It is to have conscience, always do what is right, integrity, honesty and being focus. These are things that are driving me.
Question: Where are you taking the board to?
Wabote: The board has 10-year strategic programme, which we developed in 2017. We have a clear roadmap on where we want to go in the next 10 years. We want to take local content to 70 percent in the next 10 years. There are so many things, strategic pillars and enablers that we will trigger and activities that we must do to take us to the 70 percent by the year 2027. So it is all mapped out and I believe that even if I’m not here tomorrow, whoever comes will know the strategic intents of the board and then will key-in and sustain that tempo. So long as that person is a professional that is selected in line with the provisions of the Act.
Question: you have any other information you would like us to know?
Wabote: No. All is done.