Chikezie Nwosu, Managing Director/Chief Executive Officer of Waltersmith Petroman has in a recent interview, discussed the company’s business upstream, its Equatorial Guinea assets, human capacity development and other impending issues like the investment in renewables. Waltersmith Petroman, after an initial decision to drop its acquisitions in Uganda, took up assets in Equatorial Guinea. On this update, Nwosu explained that in 2019, bids with many international companies for the EG-Ronda, an offshore block with immense oil and gas reserves, was put through and while the company signed the necessary documents, the legal process was disrupted by the the Covid-19 outbreak, as well as some internal discrepancies. With the company planning on setting up its first international office there, he noted that a letter was sent to them with a promise for the PSC signature.
When asked why the company did not get any field in the recently completed 2020 marginal field bid round, he answered that the company placed that they believed to be the best technical and commercial bid with no aim to pay any ridiculous signature bonus to anyone. He explained that without any form of hampering on people’s development via the signature bonuses, the value accumulated from royalties and government taxes was more valuable than any upfront signature bonus and as such, the company’s decision to bring down the signature bonuses and focus on technical and commercial proficiency for a quick delivery of these fields cost the company.
Waltersmith working on human capital development in host communities.
Continuing on about the relationship between Waltersmith’s three arms and its host community, Nwosu stated that they have had to deal with various companies at arm’s length as a result of their various company boards. He however indicated that the energy constituents mandatorily report to him with their transactions, kept at arm’s length. He also noted that the refinery was saddled with paying the commercial rate for oil emerging from the upstream part of the business. On how the company deals with the communities, Nwosu stated that there was a Global Memorandum of Understanding (GoU) designed for Waltersmith as a group and not an individual organization. According to him, the company adjusted its GMoU and had an agreement with the communities that for every new project, there would be an increase in the GMoU funding.
On what Waltersmith does in these communities and what they are working on changing, Nwosu stated that the human capital development was a crucial one. He said that the quality must be right and as such, working to create good paying jobs and establishing technical skill acquisition programs. He added that Waltersmith would collaborate with other companies in the communities to put utilities like good water and electricity in place. Nwosu noted that about 200 graduates from the community were identified but not industry ready. In preparing them for the industry, a program was enacted in which 47 of 50 in the first batch attended. He also pointed out that the company had hired 12 of the 47 attendants.
Oil production decline in Nigeria not majorly a result of crude oil theft.
Asides establishing a special technical skill and acquisition program for the communities, he stated that the company had also designed an inclusive program for all Nigerians called the Graduate Intensive Program, and advised that the program was on operations and maintenance. He also noted that these programs had further enhanced the company’s relationship with the youths in the communities. With the Host community regulations, the Managing Director said that numerous changes would be witnessed.
When asked about whether the company just stops producing once a significant volume of theft is detected, Nwosu said explained that Austin Avuru and Osten Olorunishola had shown crucial works in indicating that even without crude thefts, assets would still decline as a result of the lack of investment, with the yearly decline between 10 to 15 percent. He noted that production increase was heavily dependent on new developments, investments, new production optimization, as well as an enhanced recovery of oil. As such, he insisted that the county’s oil production decline from about 2 million barrels to 1.2 million daily barrels was not as a result of the oil theft. He however indicated that crude oil theft was a still a major problem, especially on the onshore assets.
Company is also working on solar energy and Blue Hydrogen.
Nwosu disclosed that besides Solar energy, the company was also working on Blue Hydrogen. He noted that the company recognized the imminent transition that would occur through gas and as such, was working on enhancing their gas business to dominate the upstream. He however added that the significant greenhouse emission of gas was being considered and as such, there was a need to start replacing some of the gas and fossil oil to power via refinery and into more renewable sources.