There is a quote that says: ‘the definition of insanity is doing the same thing over and over again and expecting a different result'. It's often attributed to Albert Einstein, but it perfectly describes the state of the oil sector in Nigeria. Governments come and go, oil licences are approved, and the heavy lifting is done by international oil companies headquartered in capital cities in far-away cities led by executives who've been to Nigeria a handful of times, if at all.
That's the way it's always been done. For all the talk of prosperity and economic empowerment, and no matter how many new committees or departments each new government creates to encourage the true potential of the sector, the oil business isn't changing and isn't flourishing. They do the same thing over and over and expect a different result. It's not insanity, it's negligence.
But within the stagnation, one company is at last doing things differently and the approach is already yielding results: Aiteo. I first read about Aiteo when the company shook off the old Sigmund Communecci brand and burst into the big leagues by fighting off some of the biggest names in global oil products to snap up what is thought to be Nigeria's largest oil block: OML 29. OML 29 was one of these massively bounteous blocks that plenty had tried to make a success of and plenty had failed. A story of great potential being squandered by mismanagement - not such a bad metaphor for the industry as a whole.
But enter Aiteo. Leading a small consortium of indigenous oil companies, Aiteo snapped up OML 29 and boy have they showed the big players how it's done. In its first year managing output from the block, Aiteo tripled production levels to almost 100,000 barrels per day (bdp). Shell, even at its absolute prime working the block, had just about managed 30,000. What's more, Aiteo have kept those levels consistent rather than pulling the old trick of celebrating spikes on the graph to hide a modest output across the board. But as always, behind the statistics lies something more profound. A cultural shift, as much as a corporate one.
Aiteo has been relentless in the consistency with which it has championed the use independent, local operators to support its operations. Benedict Peters, Chairman of Aiteo Group, has made a point of publicly endorsing the 2010 Local Content Act and been one of the most vociferous evangelists for acting upon its recommendations. Writing for this website, OilVoice, earlier in the year Benedict Peters said that Nigeria needs a “renewed confidence in local content players” and has led by example by showing just exactly how a local firm can outflank the IOCs.
But outside of the nuts and bolts of running the operations of Aiteo, the business has demonstrated real leadership in the structure, ambitions and relationships it maintains very publicly. Plenty of indigenous oil companies are very happy to stay in their area, not cause any trouble, not explore opportunities beyond its own borders. And they wonder why the sector isn't getting bigger or better?! Having an international vision for a company in today's globalised world is absolutely essential. And if Shell or Chevron can bring the Netherlands or the United States to Nigeria, why shouldn't Aiteo take Nigeria to the world? With due credit to the leadership of Benedict Peters, Aiteo took its first steps to a more international presence with the appointment of a former investment banker and former diplomat to the role of Group Advisor on Business and Capital Development. Tasked exclusively with ‘reinforcing the Group's growth and diversification targets in Nigeria and across Africa as a whole', according to a company press release from May this year, the appointment signals a decisive leap forward in building the stature of the business.
So too at home Aiteo is providing a positive model for others to follow by addressing the public role that Nigerian oil companies play to support civil and social groups inside the country. Certainly a surprising move at the time, but no one today can criticise Aiteo's decision to sponsor both the Nigerian Football Federation (NFF) and the coaching staff for its national soccer team, the Super Eagles. If the latest results against the mighty Cameroon are anything to go by (4-0 and 1-1, go on Eagles!), Aiteo's sponsorship is bringing stability, funding and expertise to a team that has historically been constrained by management disruption.
It's definitely an exciting time to be working in the oil market in Nigeria. It remains to be seen how the year will end out for the market, but if there are going to be more and more Aiteos then the reputation and stability of our biggest national asset is in safe hands for 2018 and the future.