Olalekan Akinyanmi, CEO of Lekoil, talked about developing corporate assets in the continent in his presentation to Africa Oil Week and in an exclusive interview with Oil Review Africa
At the conference, he said that Lekoil, “an indigenous E&P company” is “poised for strong production growth” and is “headed for commercial production”, while keeping costs under control and creating value “throughout the cycle”.
“Money, assets and people” are the three things Mr Akinyanmi cited as being essential for successful hydrocarbons operations. He said that money and “a solid group of backers” is the starting point, and this leads to investment in assets, technology and people.
“We are making painstaking efforts to build a strong team,” said Mr Akinyanmi of the challenge to find the right people. He added to the growing group of voices at the conference calling for more geologists to get involved with oil and gas.
“We have in-house training in the almost-lost arts so we keep that knowledge.”
Mr Akinyanmi said that it is important to be selective about what deals are made, telling the conference that the company had looked into 60 different deals and only signing three.
“We are determined to deliver returns,” he told the conference.
Community involvement is also important, according to Mr Akinyanmi. Involving local communities in security - a common theme across multiple speakers at Africa Oil Week - is “mutually beneficial” and has “operational benefits”, aligning the interests of the community with the interests of the company. Developing power plants to bring energy to communities is another important part of this strategy for Lekoil.
“The security issue is real,” Mr Akinyanmi told the conference. “We are quite fortunate in that our assets are not tied to existing networks.” However, this does not mean Lekoil is complacent in terms of security for Niger Delta operations, and Mr Akinyanmi urges “a better network of pipelines that criss-cross the area” where security threats are prevalent.
In his interview with Oil Review Africa, Mr Akinyanmi talked about forthcoming first oil from the Otakikpo field, which will be Lekoil’s “next milestone”.
The importance of infrastructure, such as multiple terminals and shorter pipelines was also raised by Mr Akinyanmi. He said that while such infrastructure would “make it harder for vandals … it doesn’t mean it won’t happen.”
He echoed the sentiments of other conference speakers in terms of the importance of community engagement to ensure security and overcome poverty, which can lead to people turning to militancy. Instead, Mr Akinyanmi talked passionately about the role of companies such as Lekoil in forging a “path to a better life” with targeted CSR activities, such as medical programmes, and job creation, using local companies and using access to energy to create an industrial corridor, “with the agreement of the community”.
As well as Lekoil, Lekgas and Lekoil Namibia have been launched. In regard to Lekgas, Mr Akinyanmi told Oil Review Africa that “it is clear gas is going to be a powerful story”.
“Lekgas is a separate legal entity which has tax advantages and helps attract capital,” he said.
He described Lekoil Namibia as “exciting but there is still a lot of work to do.”
“It is easier to do business in Namibia, [but] the regulations are still being tweaked,” Mr Akinyanmi said.
Looking ahead, Mr Akinyanmi said that the biggest hurdles facing African hydrocarbons development are access to good capital and technology. He also cited a need for law enforcement, transparency and governance for Nigeria.
“If we don’t get it right, the country can’t attract capital, we have to get serious,” he said. “We’ve got to do it right - the top is good but the government needs to show it means business. We will wait and see.”