Trust, An Important Ingredient For Success

In this interview with Ejiofor Alike of ThisDay newspaper, our Managing Director, Mr. Adams Okoene, spoke on the company's operations, prospects and challenges as well as losses due to tampering of their pipelines and local bunkering.


…The Secret of Midwestern's Successful Production in the Marginal Fields

First of all, it is the grace of God, because you can be the cleverest, the richest, but if the grace of God isn't there, nothing would happen. So I give God the glory that we have been successful. Having said that, it takes a lot to bring a field on stream, you need to have the expertise, you need to have the money and you need to be able to co-exist with your communities. I know some of the awards that were made had all kinds of difficulties. To get the agreement signed was a problem for quite a number of them. And then of course to get the money you need to develop the field was problematic. For the banking industry in this country, their appetite for risk was very low and therefore if you were looking towards the Nigerian banking industry to fund what you need to do,… a few years ago it was a very difficult thing. But that is changing because the appetite for risk in Nigerian banks is now much better and oil industry is high risk, high reward.

So if you were not prepared to take the risk, then you wouldn't get high rewards that come. We were lucky we had some money and was prepared to take the risk on our behalf and that is why I always mention Mart Resources Inc. they came to us, they had the money and they were prepared to take the risk and we signed an agreement with them to provide what is needed to develop the fields we have been successful and we have been able to work the agreement not only between us and Sun Trust, the 30 percent JV partner. We are the operator and Sun Trust is the non- operator. We have also been able to work the agreement between us Mart Resources. To a large extent, the success of the field was dependent on our ability to work close to the agreements. The other part of it is working with the communities. No matter how much money you have or approvals you get from the government, if the communities don't let you operate you would not be able to operate. So the final license to operate comes from the communities. So once you have reached an agreement with the communities and you are able to come to accommodation between yourself and the communities, then you can operate. So those are the key elements that have ensured our success in this field.

Overcoming the Challenges Faced by Others

We have been hard working; we have been flexible in our approach and you have to learn to sometimes bend over backwards to accommodate others. If you maintain a rigid position and your partner maintain a rigid position, nobody is going anywhere. I think is a part of the problem those other people have had and they have had other issues as well as such as financing, etc. so you have to be prepared to be flexible. The same thing applies to the situation that Midwestern was in; you have to take a view on any issue. Well this is our position we must maintain this position and the other person maintains his own position, then nothing happens.

Giving back to the Communities in terms of Corporate Social Responsibilities (CSR)

I take this aspect of the business very critical. It is as critical for me as health, safety and environment. I have three host communities and I want them to believe in me, I want them to believe in me when I say I am going to do anything for them. First of all, I believe I would do it and then agree with them on the plan of implementation. I want them to see in me actually implementing the milestone that I have said I would implement and then integrity comes in. They believe what you say. When they see you are actually implementing what you have said you would do, then trust is built. If there is no trust, you really cannot get anywhere. I have a budget every year that is agreed between me and the host communities. Once the trust is built, half of the problem is solved. The other half is being able to stay clear from internal problems of the community. Those internal problems would be there, even the best communities have internal problems because not everybody believes what is good for the community is good for them. Some believe what enters their pockets is only what they want to see. So if you are going to be successful, you have to maneuver your way through those internal issues and still be able to do the things you believe are the things that are good for the communities. But you then have to agree on a system with the community that enables you to do projects and things for the community without the cash ending up in a few pockets in the community. We have a principle of no cash. We put the money in projects that people can see and the best for a community as a whole. And the fact that we have the Delta State on our side and part of the ownership of the company helps. Delta State government has also said no cash and when things get difficult, we can always tell the communities not to forget we have a big brother called Delta State government.

Some of the Projects Implemented

We have built community centers. We have awarded scholarships, we have given out books to schools, and we have supported the communities in terms of when they have festivals and so on. We have built roads for the community, but for me, the star project is the amenity ward we are about to start building in Kwale. It is going to be the best around that place. We have taken the step to get necessary approvals so all the processes for approving health schemes, we already have.

It has taken a bit of time because of the approvals and I believe that even it is something that is good for the community, due process must be followed. It has taken a bit of time but that would be the star project.

The Company's Production Target since currently producing 12,000 to 15,000 barrels of oil per day

Our immediate target is to produce the amount of crude that is locked behind the pipe that we cannot produce. To do that, we are currently building another evacuation pipeline. So instead of going through the Agip facilities and going through Brass terminal, this would go westward through Eriemo manifold to Forcados. It would be supplementary to what we have and we are having a lot of issues in building that pipeline because it runs through about 30 communities and that is 30 problems. But we hoping we would be able to get that pipeline in place the first quarter of next year and that would help us evacuate all that we are capable of producing.

We also intend to develop the field more. There are prospect we have not evacuated yet and we are hopeful we would be able to produce between 25,000 to 30,000 barrels per day from that field.

Culled from ThisDay of August 6, 2013