Thought Leadership:
Sailing Against the Tide: A Comprehensive Approach to Managing an OML Producing Oilfield Asset in Nigeria’s Shallow Waters 

 By Ritchie Wingo

 Prologue:

As a Chief Operating Officer (COO) of a prominent Nigerian oil and gas servicing company, I am entrusted with the navigation of a highly valuable and complex asset – an Oil Mining Lease (OML) located in the shallow waters off Nigeria’s coast.

This task encompasses a myriad of dimensions, each with its unique set of challenges and opportunities. From addressing environmental considerations, resolving technical complexities, adhering to stringent regulatory norms, nurturing robust relationships within the local community, to steering towards profitability while maintaining the highest level of operational efficiency – the role of a COO is a multifaceted balancing act that demands a keen understanding of the industry’s intricacies and a visionary approach.

1. Operational Efficiency: Mastering the Art of Technical Agility

One of the core challenges in managing an OML in Nigeria’s shallow waters is ensuring high levels of operational efficiency amidst a multitude of technical complexities.

Aging infrastructures, the need for regular maintenance of drilling platforms and underwater pipelines, crafting and implementing efficient extraction methods, and mitigating the impact of unforeseen natural obstacles – all these factors present a significant task that requires careful planning and innovative solutions.

Solution:

At OML Asset, our commitment to operational efficiency revolves around two key pillars, employing cutting-edge technology and fostering continuous personnel development. Our emphasis on leveraging advanced technology allows us to enhance monitoring and maintenance capabilities, while our investment in personnel development ensures that our team is always equipped to handle any challenges that may arise.

Digital twin technology plays a pivotal role in our pursuit of operational excellence. This innovative approach involves creating real-time, virtual replicas of our physical assets. By generating a virtual model of the OML asset rig, we gain valuable insights into the rig’s performance and condition.

Monitoring critical components, such as the drilling platform, derrick integrity, drawworks efficiency, and blowout preventer status, in real-time empowers us to make informed decisions.

With digital twin technology, we can accurately predict maintenance needs and identify potential operational improvements. This proactive approach significantly reduces the likelihood of unscheduled downtimes, thereby minimizing costly disruptions to our operations. By staying ahead of maintenance requirements, we optimize asset utilization, thereby prolonging the operational lifespan of our rigs.

To support our commitment to operational excellence, we recognize the importance of a technically competent team. Our personnel are the backbone of our success, and we prioritize their continuous development. Regular training and development programs are a central part of our approach, focusing on key areas essential for efficient rig operations.

Through comprehensive training sessions, our team gains a deep understanding of the intricate workings of drilling rigs, ensuring they are well-equipped to handle complex rig-related tasks. Additionally, they are trained in maintaining underwater pipelines, a critical aspect of our operations, to ensure smooth and reliable oil and gas transportation.

Moreover, our personnel undergo rigorous training in troubleshooting common technical issues that might arise during rig operations. Armed with comprehensive knowledge and hands-on experience, our team can swiftly and effectively address any challenges, ensuring uninterrupted operations and minimizing downtime.

Encouraging our personnel to stay updated with the latest technological advancements and industry best practices is another key aspect of our approach. By fostering a culture of learning and innovation, we create a workforce that is agile, adaptive, and equipped to embrace emerging technologies and trends in the oil and gas industry.

In conclusion, our two-fold approach to operational efficiency at OML Asset revolves around harnessing the power of digital twin technology for real-time monitoring and predictive maintenance and investing in the continuous development of our personnel. By combining cutting-edge technology with a highly skilled and knowledgeable team, we ensure the smooth and efficient operation of our asset rigs, maximizing productivity and optimizing the value of our investments.

2. Environmental Stewardship: Prioritizing Ecological Sustainability

Operating an OML in ecologically sensitive shallow waters necessitates a keen focus on environmental sustainability. The potential for oil spills, which can cause extensive ecological damage, disturbances to marine ecosystems due to drilling activities, and potential damage to underwater flora and fauna due to infrastructural installations are significant challenges.

Solution:

At OML Asset, environmental stewardship is at the core of our operations. We have implemented a proactive and environmentally conscious approach throughout every stage of our activities, from planning and implementation to post-operation evaluation. Our commitment to minimizing our environmental footprint drives our choice of technologies and practices.

To prevent oil spills and promptly respond in case of emergencies, we employ advanced leak detection systems in our pipelines. These systems utilize sophisticated sensors and monitoring tools to detect even the slightest anomalies in the pipeline’s integrity. In the event of a potential leak, automatic shutoff valves are activated to isolate the affected section, preventing the spill from spreading further.

In the unlikely event of an oil spill, we have a dedicated and highly trained emergency response team on standby. Equipped with specialized spill response vessels and advanced containment equipment, this team can respond rapidly to mitigate the impact on the environment. By swiftly containing and cleaning up any spilled oil, we aim to reduce the potential harm to marine life and coastal ecosystems.

For our drilling activities, we prioritize environmentally-friendly methods. One key aspect is the use of water-based drilling muds with lower toxicity compared to traditional oil-based muds. This choice minimizes the potential harm to marine life and reduces the risk of polluting marine environments. By opting for water-based drilling muds, we demonstrate our commitment to safeguarding the delicate balance of marine ecosystems.

In addition, we embrace drilling cuttings reinjection techniques as part of our environmental approach. Instead of disposing of drill cuttings as waste, we reinject them back into the reservoir from which they were extracted. This technique not only reduces waste generation but also mitigates the potential environmental impact associated with traditional disposal methods.

To ensure continuous improvement and adherence to international best practices, we regularly conduct comprehensive environmental impact assessments. These assessments allow us to quantify our environmental impact across various stages of our operations. By thoroughly evaluating our practices, we can identify areas for improvement and optimize our strategies to minimize our ecological footprint further.

Our commitment to environmental stewardship goes beyond mere compliance with regulations; it is ingrained in our corporate culture. We continuously seek innovative solutions and technologies that align with our values of sustainability and responsibility. By embracing environmentally conscious practices and constantly refining our operational strategies, we strive to set new standards for environmentally responsible oil and gas operations in the industry.

3. Regulatory Compliance: Steering through the Legal Maze

Managing an OML in Nigeria involves navigating through a maze of stringent regulatory requirements. From environmental protection norms, safety standards, and local content obligations, to fiscal regulations, the landscape of regulatory compliance is vast and complex.

Solution:

At OML Asset, ensuring compliance with all relevant regulations is of paramount importance in navigating the complex legal landscape of the oil and gas industry. To achieve this, we have established a robust compliance system, backed by a dedicated team that remains vigilant about the latest regulatory changes.

The heart of our compliance efforts lies in our specialized compliance team, which consists of experts well-versed in the intricacies of the industry’s legal and regulatory framework. Their primary responsibility is to keep abreast of any modifications to existing regulations and to closely monitor the introduction of new ones.

The compliance team proactively attends industry seminars, workshops, and conferences, where they gain insights from regulatory experts and key industry stakeholders. This proactive approach allows us to stay ahead of any impending regulatory shifts and prepares us to adapt our operational strategies accordingly.

Furthermore, our team actively networks with peers within the industry to exchange information and best practices. By fostering collaborative relationships, we can share knowledge about compliance challenges and emerging solutions, which aids in refining our compliance processes.

To ensure thorough compliance, regular internal and external audits are conducted. Internal audits are carried out within the company by independent auditors, scrutinizing our operational processes and practices to identify any potential compliance gaps. External audits, on the other hand, involve third-party organizations that objectively evaluate our compliance efforts against industry standards and legal requirements.

In addition to attending seminars and networking events, our compliance team also subscribes to regulatory update services. These services provide real-time notifications about any changes in regulations, helping us respond promptly and effectively to evolving legal requirements.

When regulatory changes occur, the compliance team works closely with relevant departments within the organization to assess the impact on our operations. They collaborate with operational teams to develop and implement necessary adjustments, ensuring full compliance with the revised regulations.

Our commitment to maintaining compliance goes beyond mere adherence to the minimum requirements. We view compliance as an integral part of our corporate responsibility and ethical business practices. By actively engaging with the regulatory landscape, attending industry events, and conducting regular audits, we are well-prepared to meet any challenges that arise in the ever-changing world of oil and gas regulations.

Overall, our proactive compliance approach empowers us to operate in full alignment with legal mandates and industry standards. By having a dedicated compliance team that stays informed, engages in continuous learning, and conducts thorough audits, we demonstrate our commitment to responsible and compliant operations at OML Asset.

4. Community Relations: Fostering Harmonious Relationships

Our OML operations have a profound impact on the local communities residing in its vicinity. Ensuring harmonious relations with these communities is vital to maintaining a conducive operational environment.

Solution:

At OML Asset, our commitment goes beyond solely focusing on oil rig operations; we prioritize bringing tangible benefits to the local communities in which we operate. Through various initiatives, we strive to create a positive and sustainable impact on the lives of the people living in these areas.

One significant way we support the local communities is through educational scholarships for local youth. We believe in empowering the younger generation with the knowledge and skills they need to build a brighter future. By providing scholarships, we enable deserving students to pursue higher education and training opportunities that may have otherwise been financially out of reach.

Furthermore, we understand the importance of vocational training programs in enhancing employability and creating opportunities for the local workforce. As part of our commitment to skill development, we establish vocational training centers that offer specialized courses tailored to the specific needs of the region. These programs equip individuals with practical skills that align with the job market demands, making them more competitive and self-sufficient.

To promote local economic growth and development, we actively seek opportunities to source supplies and services from nearby businesses wherever feasible. By engaging local vendors and contractors, we contribute to the growth of the local economy, creating a ripple effect that benefits a wide range of stakeholders in the community.

Ensuring the well-being of the local communities is equally important to us. Therefore, we establish healthcare facilities that offer accessible and quality medical services to the residents. These facilities cater to both routine healthcare needs and emergencies, enhancing the overall health and welfare of the community members.

To facilitate effective communication and engagement, we have a dedicated community relations team in place. This team serves as a bridge between OML Asset and the local communities, actively seeking their feedback, addressing any concerns they may have, and ensuring that our operations align with their needs and aspirations. The team conducts regular meetings, community forums, and open discussions to foster a spirit of collaboration and mutual understanding.

By maintaining an open and transparent dialogue with the local communities, we build trust and strong relationships. This approach enables us to proactively address any issues that may arise and find mutually beneficial solutions to challenges that affect both our operations and the community.

In conclusion, our commitment to the local communities where we operate drives our efforts to create lasting positive impacts. Through educational scholarships, vocational training, support for local businesses, and healthcare facilities, we seek to empower the community members and contribute to their well-being and progress.

With a dedicated community relations team fostering communication and understanding, we aim to build strong, sustainable partnerships that benefit all stakeholders involved. At OML Asset, our vision extends beyond oil rig operations; we envision a future where our presence positively transforms the lives of the people living in the regions we serve.

5. Market Volatility: Bracing Against Economic Uncertainties

The oil and gas industry is characterized by market volatility, with fluctuations in oil prices directly impacting the profitability of our OML. Various factors, including global events, policy changes, and climate change actions, contribute to this volatility.

Solution:

At OML Asset, we take a strategic approach to mitigate the impact of market volatility and build a robust and sustainable business model. One of the key elements of our strategy is diversification. By expanding our operations beyond traditional oil production, we create a portfolio that is less susceptible to fluctuations in oil prices and market dynamics.

One significant aspect of our diversification strategy is venturing into natural gas production. Natural gas is an important and cleaner alternative to traditional fossil fuels, and demand for it has been steadily increasing. By exploring opportunities in natural gas production, we tap into a growing market and reduce our reliance on oil alone.

In line with our commitment to environmental sustainability, we also seek to explore opportunities in renewable energy. Renewable energy sources such as wind, solar, and geothermal power are becoming increasingly competitive and attractive. By investing in renewable energy projects, we not only contribute to reducing greenhouse gas emissions but also position ourselves to benefit from the evolving energy landscape.

Furthermore, we expand into downstream activities like refining and petrochemicals. Diversifying into downstream operations allows us to capture value at multiple stages of the energy value chain. Through refining, we can process crude oil into various products like gasoline, diesel, and aviation fuel, which can be sold to consumers and industries. Petrochemicals, on the other hand, offer a wide range of valuable products used in various industries, from plastics and textiles to pharmaceuticals and construction materials.

In addition to diversification, enhancing operational efficiency is a fundamental part of our strategy. Reducing production costs makes us more resilient during periods of low oil prices and enables us to maintain profitability even in challenging market conditions.

To achieve operational efficiency, we continuously invest in advanced extraction technologies. These technologies allow us to extract hydrocarbons more effectively and with minimal environmental impact. By optimizing our logistics and supply chains, we ensure that our products reach the market efficiently, reducing transportation costs and enhancing our competitiveness.

Streamlining administrative processes is another area of focus for us. By leveraging digital solutions and automation, we streamline various administrative tasks, reducing paperwork and manual processes. This not only improves overall efficiency but also frees up valuable resources to be redirected towards other critical areas of our operations.

In conclusion, at OML Asset, we adopt a strategic approach to navigate through market volatility successfully. Diversifying our operations into natural gas production, renewable energy, and downstream activities provides us with a well-balanced and resilient portfolio.

Simultaneously, our dedication to enhancing operational efficiency through advanced extraction technologies, optimized logistics, and streamlined administrative processes ensures that we maintain a competitive edge and remain financially strong even during challenging market conditions.

Our commitment to sustainability, innovation, and adaptability allows us to thrive in a rapidly evolving energy landscape while creating value for our stakeholders and contributing positively to the world’s energy needs.

Conclusion:

As the Chief Operating Officer (COO) of OML Asset, I recognize the magnitude of the task at hand in operating a producing rig in the shallow waters off Nigeria’s coast. This unique operational environment demands a strategic and meticulous approach, and it is crucial to navigate through the challenges with precision and foresight.

To ensure success, our journey begins with assembling a skilled and dedicated team. The expertise and commitment of our personnel are instrumental in driving our operations forward. From the engineers and technicians who maintain the rig’s integrity to the logistics experts who optimize our supply chain, each member plays a vital role in our success.

Our unwavering determination is the driving force behind our pursuit of sustainable growth and prosperity. Despite the complexities of the industry and the ever-changing market dynamics, we remain steadfast in our pursuit of excellence. We embrace innovation, continuously seek opportunities for improvement, and remain agile in responding to emerging trends and challenges.

A deep understanding of the operational environment is central to our decision-making process. By conducting thorough assessments and analyses, we gain valuable insights into the intricacies of the offshore operations. This knowledge allows us to make informed decisions, minimizing risks, and maximizing efficiency.

At the core of our approach is a commitment to our values of integrity, accountability, and environmental stewardship. We prioritize ethical conduct in all our dealings, ensuring transparency and fairness in our operations. Accountability is ingrained in our corporate culture, where each team member takes responsibility for their actions and their impact on our stakeholders.

Environmental stewardship is a key pillar of our operations. We recognize our responsibility to minimize our ecological footprint and contribute positively to the environment. From employing advanced technologies to reduce emissions and environmental impact to actively engaging with the local communities to promote sustainability, we embrace our role as responsible custodians of the environment.

As we navigate the waters of Nigeria’s oil and gas sector, we are driven by a vision of transforming our OML into a beacon of responsible and efficient management. Our goal is not only to achieve operational excellence but also to set new industry standards. By adhering to our principles and maintaining a relentless focus on safety, sustainability, and stakeholder value, we are confident in forging a path to success.

In conclusion, the journey of operating OML Asset offshore from a COO’s perspective is both challenging and rewarding. Through careful navigation, a dedicated team, and a commitment to our values, we are poised to achieve sustainable growth and prosperity.

Our aspiration is to serve as a model of responsible and efficient management in Nigeria’s oil and gas sector, leaving a positive legacy for the industry and the communities we operate in. As we set sail on this transformative journey, we remain inspired by the opportunities ahead and unwavering in our determination to make a meaningful and lasting impact.

About the author:

For nearly 15 years, Ritchie Wingo has been a prominent figure in the Oil and Gas Industry, particularly in West Africa. Holding the prestigious position of Director of Oil and Gas at PwC, Ritchie has amassed a wealth of experience and expertise in the region’s energy landscape. His impressive track record includes successful collaborations with numerous Indigenous Oil and Gas Companies in West Africa.

With a strong technical background, Ritchie is a visionary leader who constantly strives for innovation within the industry. He is driven by a passion for integrating cutting-edge technology into company processes, which not only enhances efficiency but also drives sustainable growth. Through his keen eye for emerging technologies and forward-thinking approach, Ritchie has played a pivotal role in driving organizations toward a more technologically advanced and competitive future.

Ritchie’s dedication to progress and development is reflected in his role as a key decision-maker within PwC. He continuously seeks opportunities to optimize operations, improve processes, and implement industry best practices. His strategic insights and commitment to excellence have earned him a reputation as a trusted advisor and a catalyst for positive change in the Oil and Gas sector.

For inquiries: ritch.wingo@wren-consulting.com