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By LOUIS IBA
Executive Vice Chairman/CEO, Techno Oil Limited, Mrs. Nkechi Obi, is one of the few industrious women in Nigeria who have made remarkable achievements in the nation’s downstream sector.
As chief executive officer, Obi has steered the affairs of the company through the rough routes of the Nigerian oil and gas sector to become one of the nation’s leading fuel distribution and cooking gas supply firms.
The last 15 years of democracy, according to her, have greatly assisted in stabilising the polity with more businesses springing up. But she is worried about the hype on profitability of businesses as against the Corporate Social Responsibility (CSR) of investors.
“It must not be all about profitability. It is high time the issue of CSR is taken seriously within the business community if we must address some of our challenges particularly in areas of education sector where we expect to continue to get the requisite manpower.
“I want more corporate organisations and business owners to rise up to the challenge of assisting the government redress Nigeria’s rising poverty, the rot in the education system and the literacy level among youths even in our host communities. This is the direction we are going in Techno Oil,” she said.
In this interview, she speaks on the deregulation of the downstream sector and also examines the effect of inconsistent policies on the petroleum sector and the imperatives of passing the Petroleum Industry Bill (PIB) into law.
Excerpts:
The company
I hold a B.Sc in Economics and I started my working career with ExxonMobil before venturing into private business.
As the CEO of Techno Oil, an indigenous oil and gas company, I am ever proud that I have nurtured the company to remarkable success. Today, the firm has been established as a leading oil and gas company operating in the downstream with staff strength of 215.
I have led Techno Oil to become a dominant player in the distribution of petroleum products across Nigeria, having also nurtured a business partnership with NNPC/PPMC in products distribution spanning more than 15 years in a regulated market.
We are deploying our own doggedness to make a difference. Recently, we took advantage of the reforms and opportunities in the power sector to get TechnoGas and Power Limited positioned as a key player and with all sense of humility, I will tell you I have built what no one can fault to be an impressive track-record and exhibited a dynamic and purposeful leadership as an entrepreneur and leader in the petroleum industry. I have also contributed immensely to the nation’s GDP.
Using the CSR platform of Techno Oil, we have reached new heights in giving to charity. We have awarded scholarships to indigent Nigerians and financed the construction of classroom blocks/ICT centres in secondary schools in Lagos, Abia and Anambra states.
Above all, I have a working experience spanning over 25 years in the petroleum industry.
The downstream sector
Let me start by saying that investment in the downstream sub-sector has continued to be on the increase notably by Nigerians. However, like every investor in the sector will tell you, the early passage of Petroleum Industry Bill (PIB) would increase the level of investment in the sector.
Without sounding like I am exaggerating this, the downstream is one area that has recorded the greatest indigenous participation as more Nigerian-owned companies are springing up regularly with huge investment. This is an area where the local content initiative that was put in place by the Federal Government has really worked remarkably well.
However, developmental efforts are being frustrated by funding and infrastructural challenges. The biggest challenge in downstream is funding and deep seaport.
On funding, there is no clear policy from CBN on accessing intervention funds to help with either projects or trading, unlike what obtains in some other sectors. Even with the difficulty of obtaining funds at very high interest rate, which results in very slim margins, the Ministry of Finance has not kept to agreed terms of payment, which is 45 days after the issuance of Sovereign Debt Notes (SDN). This action of theirs has totally eroded our slim margins. I hope 2014 will be better.
Government has to as matter of urgency, provide deep seaport, which by extension allows access to large and heavily loaded vessels and by extension boasts economic activities and curtail alleged diversion. Deep seaport is expected to make distribution of petroleum products convenient for all stakeholders as big vessels discharge products directly to tank farms in Lagos and other locations.
We need to stop diversion of petroleum cargo to neighbouring countries like Cotonou and Lome because alleged revenue leakages in this sector are very huge and must be blocked. We must also ensure that other countries do not take advantage of our weak system to reap fortunes from our economy through the ports.
I am aware that the Federal Executive Council (FEC) last year approved the construction of Lekki deep seaport, building of ship dock at Koko and dredging of Warri-Aladja/Koko and Calabar ports. This is excellent but I wish to urge the FEC to replicate such gesture in the East by dredging and upgrading the Obuaku River in Ukwa West, Abia State to a deep seaport to enhance business activities in the Eastern region.
PIB
That is one issue that has been over-politicised. Honestly, the PIB is a veritable vehicle for the transformation of the petroleum industry and it is my desire that the bill is passed and implementation commenced accordingly.
It is perceived that some provisions of the bill do not suit certain interest groups. My position is that we need to start somewhere and gradually perfect the reforms and align ourselves with best global practices.
The speedy implementation of the PIB to enable deregulation policy would go a long way in encouraging inflow of private sector and international investment in the downstream sector.
I think the industry has recorded significant landmark, which will be enhanced by the passage of the PIB but the continued delay in passage portends great consequences for Nigeria and the economy since the industry has already lost billions in investment. Most investments have found their ways into neighbouring countries because they have more stable policies.
As a matter of urgency, the National Assembly should pass the bill to end the uncertainty, which the industry has been experiencing. Since Nigeria’s economic development is anchored on the petroleum industry, the numerous issues facing the industry, including funding, challenges, illegal oil bunkering, crude oil theft and pipeline vandalism must be addressed for Nigeria to maintain her place as a key contributor to global energy supply.
Deregulation
I have always been an advocate of deregulation. Currently, the downstream sector is over regulated and the earlier we deregulate the system, the better for everybody.
I think that the full deregulation of the downstream petroleum sector is vital to enable a viable oil and gas sector and efficient economy that would provide employment and encourage investment in different sectors.
Government must hands off the downstream sector and we have been on this issue for too long. Ultimately I see no reason why government should continue to be a key player in the downstream sector because the effect has always been the stifling of the operations of the downstream sector operators.
To postpone deregulation, even for one day, is dangerous for the products supply and distribution in the country. If we fail to deregulate now, the whole downstream sector of the Nigeria oil industry would collapse years to come and the consequences would be too grave for our national economy. Indeed, deregulation is an economic inevitability.
Today, the three tiers of government are well funded as a result of improved earnings from crude oil. But it is our collective responsibility to challenge and demand commensurate performance in the provision of basic amenities, improved education and health, provision of infrastructure and excellent and functional transportation mode nationwide.
Without mincing words, let me state that my support for deregulation is not because I am a player in the industry but because this is the only way majority of Nigerians will derive fair deal from the abundant petroleum resources in the country.
With deregulation, consumers will enjoy fair product prices and operators will be in a position to recover full cost and reasonable margins on their operations.
The implementation of the policy by government will give rise to efficiency in product usage, products availability and effective competition among investors.
It is only when a deregulated regime is put in place that private refineries that have been licensed can really take off. Investors who have been licensed to build refineries are scared of venturing into the multi-million-dollar project because of the regulated regime in Nigeria.
Deregulation is the bedrock for the transformation and growth in the downstream sector.
My suggestion is for government to continue to put complimentary measures in place to cushion the effects of the policy. I hope Sure-P, YouWin and other recently introduced interventions programmes will enhance the socio-economic life.
LPG consumption
The two most critical challenges in the adoption of Liquefied Petroleum Gas (LPG), which is commonly called cooking gas as a means of generating energy in Nigerian homes today are the high cost of the cylinders, which is a serious adoption barrier for those who would ordinarily want to switch to LPG.
Another challenge that is tied to the above is the issue of filling plants. We must find a way of standardising our filling stations to be able to accommodate LPG refilling capability. A situation where Nigerians would travel for over 14 kilometres before they can access a refilling facility works against the adoption of this product.
In terms of gas utilisation, I don’t think they have met the industry expectations because Nigeria is still unable to fully utilise gas and we flare quite a very huge quantity of the resources. We are not there yet because countries like Ghana and Morrocco are doing fine. We have a good number of gas reserves but as at today our gas consumption is still very low. So, government must wake up to this challenge.
That is why at Techno Oil we are using our ‘Going Green Campaign’ to reach out to the masses on gas utilisation. We have expended so much money in this advocacy because we see it as a Corporate Social Responsibility. As at today, we have distributed over 20,000 units of our cylinders. We have also gone into partnership with indigent mothers and market women as a way of empowering them to use LPG.
We give out our cylinders at highly discounted prices to encourage Nigerians switch from kerosene to gas and we believe the Federal Government will soon join us on the campaign to be able to capture the entire populace. There has been a slight increase from 120,000 metric tonnes to about 240,000 metric tonnes in 2012. We have been commended recently by government and we are happy that our efforts are appreciated by the government.
We believe that government should be able to support the efforts of the few investors in this industry by extending to them duty waivers or reduction on all the cylinders and stove accessories of which most of the parts are imported. It would also be more rewarding for government to redirect the current subsidy on kerosene to the procurement of cylinders. Studies have confirmed that high cost cylinder procurement is one of the barriers to the switch from kerosene to LPG.
CSR
I am sure you have noticed that our company, in recent time, seems to be more involved in community (academic) projects. At Techno Oil Limited, our sole objective is not all about profit. It is about service; it is indeed cardinal in our business approach to recognise the virtue of giving back to the larger society and, more importantly, our host community where we do business. I think the time has come for corporate organisations and business owners to begin to give back to the society in which they operate. It is time communities and societies felt greater impact of businesses operating there.
Techno Oil is a socially responsible organisation committed to good corporate governance and sustaining its foremost position in CSR.
The need for companies to give back to societies can never be overstressed given our peculiarity as a country where our educational system is suffering from infrastructural decay. There is so much poverty and deprivation, which government alone cannot handle.
At Techno Oil, our philanthropic activities are anchored irrevocably on the premise of ensuring that we are passionately giving back to host communities and society for providing an environment that is supportive and conducive for the pursuit of enterprise.
Our CSR is centred on education with special focus on providing infrastructure to schools. Today, we look back and believe we have recorded significant progress in this quest.
As part of our drive to improve the quality of education, Techno Oil awards scholarships annually to indigent students with a view to promoting youth education.
In 2009, the Techno Oil Adopt-a-School programme was initiated in partnership with the Federal Ministry of Education to promote education for less privileged youths.
In our humble effort, we have provided a fully furnished blocks of classrooms and ICT centres to a lot of schools, including the Dr. Lucas Memorial College, Kirikiri, Lagos State; Boys High School, Agulu in Anambra State; Isingwu Community Secondary School, Isingwu, Umuahia, Abia State, to mention but few.
Under the scheme, Techno Oil has carried out renovation of existing structures, including provision of water, sanitation facilities, facilitation of capacity building, provision of learning aids and donations to library projects in schools. This initiative has helped create conducive learning environment for schools and improved standards of teaching.
We pride ourselves in being seen as a good neighbour and responsible corporate citizen while operating in an environmentally, economically and socially responsible manner.
My vision is to institutionalize Techno Oil through strengthening the policies and procedures and building a strong management team. With all these in place, I strongly believe the brand, Techno Oil, will outlive me.
Achievements
The company has deployed various strategic assets, including a landmark 45,000 MT fuel depot, 10,000MT blending plant, 1,000MT LPG bottling plant and 20 retail outlets across Nigeria.
We also own an ultra-modern petroleum laboratory and a private petroleum terminal capable of docking two vessels simultaneously as well as a 10,000 MT vessel that has facilitated the distribution of 13 million litres of petroleum products daily in Nigeria. Techno Oil has several distribution outlets in different locations across Nigeria, supplying a range of quality products that are ISO 9001 2008 certified by NIS. This feat won Techno Oil the supplier choice of 2009.
Techno Oil’s marketing leadership and strategic assets base have continued to generate a steady cash flow for the organisation with year-on-year increase in profitability for shareholders as well as value-added services to the customers and growth for the economy. Techno Oil supports national aspirations, helps to deepen and grow Nigeria.
Executive Vice Chairman/CEO, Techno Oil Limited, Mrs. Nkechi Obi, is one of the few industrious women in Nigeria who have made remarkable achievements in the nation’s downstream sector.
As chief executive officer, Obi has steered the affairs of the company through the rough routes of the Nigerian oil and gas sector to become one of the nation’s leading fuel distribution and cooking gas supply firms.
The last 15 years of democracy, according to her, have greatly assisted in stabilising the polity with more businesses springing up. But she is worried about the hype on profitability of businesses as against the Corporate Social Responsibility (CSR) of investors.
“It must not be all about profitability. It is high time the issue of CSR is taken seriously within the business community if we must address some of our challenges particularly in areas of education sector where we expect to continue to get the requisite manpower.
“I want more corporate organisations and business owners to rise up to the challenge of assisting the government redress Nigeria’s rising poverty, the rot in the education system and the literacy level among youths even in our host communities. This is the direction we are going in Techno Oil,” she said.
In this interview, she speaks on the deregulation of the downstream sector and also examines the effect of inconsistent policies on the petroleum sector and the imperatives of passing the Petroleum Industry Bill (PIB) into law.
Excerpts:
The company
I hold a B.Sc in Economics and I started my working career with ExxonMobil before venturing into private business.
As the CEO of Techno Oil, an indigenous oil and gas company, I am ever proud that I have nurtured the company to remarkable success. Today, the firm has been established as a leading oil and gas company operating in the downstream with staff strength of 215.
I have led Techno Oil to become a dominant player in the distribution of petroleum products across Nigeria, having also nurtured a business partnership with NNPC/PPMC in products distribution spanning more than 15 years in a regulated market.
We are deploying our own doggedness to make a difference. Recently, we took advantage of the reforms and opportunities in the power sector to get TechnoGas and Power Limited positioned as a key player and with all sense of humility, I will tell you I have built what no one can fault to be an impressive track-record and exhibited a dynamic and purposeful leadership as an entrepreneur and leader in the petroleum industry. I have also contributed immensely to the nation’s GDP.
Using the CSR platform of Techno Oil, we have reached new heights in giving to charity. We have awarded scholarships to indigent Nigerians and financed the construction of classroom blocks/ICT centres in secondary schools in Lagos, Abia and Anambra states.
Above all, I have a working experience spanning over 25 years in the petroleum industry.
The downstream sector
Let me start by saying that investment in the downstream sub-sector has continued to be on the increase notably by Nigerians. However, like every investor in the sector will tell you, the early passage of Petroleum Industry Bill (PIB) would increase the level of investment in the sector.
Without sounding like I am exaggerating this, the downstream is one area that has recorded the greatest indigenous participation as more Nigerian-owned companies are springing up regularly with huge investment. This is an area where the local content initiative that was put in place by the Federal Government has really worked remarkably well.
However, developmental efforts are being frustrated by funding and infrastructural challenges. The biggest challenge in downstream is funding and deep seaport.
On funding, there is no clear policy from CBN on accessing intervention funds to help with either projects or trading, unlike what obtains in some other sectors. Even with the difficulty of obtaining funds at very high interest rate, which results in very slim margins, the Ministry of Finance has not kept to agreed terms of payment, which is 45 days after the issuance of Sovereign Debt Notes (SDN). This action of theirs has totally eroded our slim margins. I hope 2014 will be better.
Government has to as matter of urgency, provide deep seaport, which by extension allows access to large and heavily loaded vessels and by extension boasts economic activities and curtail alleged diversion. Deep seaport is expected to make distribution of petroleum products convenient for all stakeholders as big vessels discharge products directly to tank farms in Lagos and other locations.
We need to stop diversion of petroleum cargo to neighbouring countries like Cotonou and Lome because alleged revenue leakages in this sector are very huge and must be blocked. We must also ensure that other countries do not take advantage of our weak system to reap fortunes from our economy through the ports.
I am aware that the Federal Executive Council (FEC) last year approved the construction of Lekki deep seaport, building of ship dock at Koko and dredging of Warri-Aladja/Koko and Calabar ports. This is excellent but I wish to urge the FEC to replicate such gesture in the East by dredging and upgrading the Obuaku River in Ukwa West, Abia State to a deep seaport to enhance business activities in the Eastern region.
PIB
That is one issue that has been over-politicised. Honestly, the PIB is a veritable vehicle for the transformation of the petroleum industry and it is my desire that the bill is passed and implementation commenced accordingly.
It is perceived that some provisions of the bill do not suit certain interest groups. My position is that we need to start somewhere and gradually perfect the reforms and align ourselves with best global practices.
The speedy implementation of the PIB to enable deregulation policy would go a long way in encouraging inflow of private sector and international investment in the downstream sector.
I think the industry has recorded significant landmark, which will be enhanced by the passage of the PIB but the continued delay in passage portends great consequences for Nigeria and the economy since the industry has already lost billions in investment. Most investments have found their ways into neighbouring countries because they have more stable policies.
As a matter of urgency, the National Assembly should pass the bill to end the uncertainty, which the industry has been experiencing. Since Nigeria’s economic development is anchored on the petroleum industry, the numerous issues facing the industry, including funding, challenges, illegal oil bunkering, crude oil theft and pipeline vandalism must be addressed for Nigeria to maintain her place as a key contributor to global energy supply.
Deregulation
I have always been an advocate of deregulation. Currently, the downstream sector is over regulated and the earlier we deregulate the system, the better for everybody.
I think that the full deregulation of the downstream petroleum sector is vital to enable a viable oil and gas sector and efficient economy that would provide employment and encourage investment in different sectors.
Government must hands off the downstream sector and we have been on this issue for too long. Ultimately I see no reason why government should continue to be a key player in the downstream sector because the effect has always been the stifling of the operations of the downstream sector operators.
To postpone deregulation, even for one day, is dangerous for the products supply and distribution in the country. If we fail to deregulate now, the whole downstream sector of the Nigeria oil industry would collapse years to come and the consequences would be too grave for our national economy. Indeed, deregulation is an economic inevitability.
Today, the three tiers of government are well funded as a result of improved earnings from crude oil. But it is our collective responsibility to challenge and demand commensurate performance in the provision of basic amenities, improved education and health, provision of infrastructure and excellent and functional transportation mode nationwide.
Without mincing words, let me state that my support for deregulation is not because I am a player in the industry but because this is the only way majority of Nigerians will derive fair deal from the abundant petroleum resources in the country.
With deregulation, consumers will enjoy fair product prices and operators will be in a position to recover full cost and reasonable margins on their operations.
The implementation of the policy by government will give rise to efficiency in product usage, products availability and effective competition among investors.
It is only when a deregulated regime is put in place that private refineries that have been licensed can really take off. Investors who have been licensed to build refineries are scared of venturing into the multi-million-dollar project because of the regulated regime in Nigeria.
Deregulation is the bedrock for the transformation and growth in the downstream sector.
My suggestion is for government to continue to put complimentary measures in place to cushion the effects of the policy. I hope Sure-P, YouWin and other recently introduced interventions programmes will enhance the socio-economic life.
LPG consumption
The two most critical challenges in the adoption of Liquefied Petroleum Gas (LPG), which is commonly called cooking gas as a means of generating energy in Nigerian homes today are the high cost of the cylinders, which is a serious adoption barrier for those who would ordinarily want to switch to LPG.
Another challenge that is tied to the above is the issue of filling plants. We must find a way of standardising our filling stations to be able to accommodate LPG refilling capability. A situation where Nigerians would travel for over 14 kilometres before they can access a refilling facility works against the adoption of this product.
In terms of gas utilisation, I don’t think they have met the industry expectations because Nigeria is still unable to fully utilise gas and we flare quite a very huge quantity of the resources. We are not there yet because countries like Ghana and Morrocco are doing fine. We have a good number of gas reserves but as at today our gas consumption is still very low. So, government must wake up to this challenge.
That is why at Techno Oil we are using our ‘Going Green Campaign’ to reach out to the masses on gas utilisation. We have expended so much money in this advocacy because we see it as a Corporate Social Responsibility. As at today, we have distributed over 20,000 units of our cylinders. We have also gone into partnership with indigent mothers and market women as a way of empowering them to use LPG.
We give out our cylinders at highly discounted prices to encourage Nigerians switch from kerosene to gas and we believe the Federal Government will soon join us on the campaign to be able to capture the entire populace. There has been a slight increase from 120,000 metric tonnes to about 240,000 metric tonnes in 2012. We have been commended recently by government and we are happy that our efforts are appreciated by the government.
We believe that government should be able to support the efforts of the few investors in this industry by extending to them duty waivers or reduction on all the cylinders and stove accessories of which most of the parts are imported. It would also be more rewarding for government to redirect the current subsidy on kerosene to the procurement of cylinders. Studies have confirmed that high cost cylinder procurement is one of the barriers to the switch from kerosene to LPG.
CSR
I am sure you have noticed that our company, in recent time, seems to be more involved in community (academic) projects. At Techno Oil Limited, our sole objective is not all about profit. It is about service; it is indeed cardinal in our business approach to recognise the virtue of giving back to the larger society and, more importantly, our host community where we do business. I think the time has come for corporate organisations and business owners to begin to give back to the society in which they operate. It is time communities and societies felt greater impact of businesses operating there.
Techno Oil is a socially responsible organisation committed to good corporate governance and sustaining its foremost position in CSR.
The need for companies to give back to societies can never be overstressed given our peculiarity as a country where our educational system is suffering from infrastructural decay. There is so much poverty and deprivation, which government alone cannot handle.
At Techno Oil, our philanthropic activities are anchored irrevocably on the premise of ensuring that we are passionately giving back to host communities and society for providing an environment that is supportive and conducive for the pursuit of enterprise.
Our CSR is centred on education with special focus on providing infrastructure to schools. Today, we look back and believe we have recorded significant progress in this quest.
As part of our drive to improve the quality of education, Techno Oil awards scholarships annually to indigent students with a view to promoting youth education.
In 2009, the Techno Oil Adopt-a-School programme was initiated in partnership with the Federal Ministry of Education to promote education for less privileged youths.
In our humble effort, we have provided a fully furnished blocks of classrooms and ICT centres to a lot of schools, including the Dr. Lucas Memorial College, Kirikiri, Lagos State; Boys High School, Agulu in Anambra State; Isingwu Community Secondary School, Isingwu, Umuahia, Abia State, to mention but few.
Under the scheme, Techno Oil has carried out renovation of existing structures, including provision of water, sanitation facilities, facilitation of capacity building, provision of learning aids and donations to library projects in schools. This initiative has helped create conducive learning environment for schools and improved standards of teaching.
We pride ourselves in being seen as a good neighbour and responsible corporate citizen while operating in an environmentally, economically and socially responsible manner.
My vision is to institutionalize Techno Oil through strengthening the policies and procedures and building a strong management team. With all these in place, I strongly believe the brand, Techno Oil, will outlive me.
Achievements
The company has deployed various strategic assets, including a landmark 45,000 MT fuel depot, 10,000MT blending plant, 1,000MT LPG bottling plant and 20 retail outlets across Nigeria.
We also own an ultra-modern petroleum laboratory and a private petroleum terminal capable of docking two vessels simultaneously as well as a 10,000 MT vessel that has facilitated the distribution of 13 million litres of petroleum products daily in Nigeria. Techno Oil has several distribution outlets in different locations across Nigeria, supplying a range of quality products that are ISO 9001 2008 certified by NIS. This feat won Techno Oil the supplier choice of 2009.
Techno Oil’s marketing leadership and strategic assets base have continued to generate a steady cash flow for the organisation with year-on-year increase in profitability for shareholders as well as value-added services to the customers and growth for the economy. Techno Oil supports national aspirations, helps to deepen and grow Nigeria.
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