| We want to be the first upstream
oil firm quoted on the stock exchange, says Kase Lawal, Chairman,
Allied Energy Plc
By FRANCA UDO-INYANG
Thursday, August
21, 2008
 |
•Kase
Lawal
Photo : Sun News Publishing |
|
Mr. Kase Lawal, Chairman, Allied Energy Plc, is one Nigerian
entrepreneur that is highly revered in the United States of
America (USA) because of his exploits in that country’s
oil and gas industry. Lawal, portrays the grace to grace story;
that there is a huge reward for hard work, focus, commitment
and dedication to duty.
In the early 70’s, the young Lawal, had left the shores
of Nigeria for the U.S in pursuit of university education.
Lawal, started his working career as a chemist for Halliburton
and later chemical engineer with Shell Oil Refining Company.
But his romance with paid jobs did not last long as he soon
opted out to be his own employer with the establishment of
Camac Holdings in Houston, USA in 1986. At first, the company
was into agricultural commodities business trading on barley,
tobacco and other grains from the U.S to countries in West
Africa.
But in 1989 when the Federal Government’s local content
drive in the oil and gas industry started gaining momentum,
Lawal shifted focus and made an inroad into the oil and gas
industry, with the establishment of Allied Energy Plc.
Lawal, recently hosted journalists in Lagos where he spoke
on the feats accomplished by the company in the Nigerian oil
and gas industry. He also disclosed plans to get the company
listed on the floor of the Nigerian Stock Exchange as the
first indigenous crude oil exploration and exploitation company.
Excerpts:
Background
I am from Ibadan in Oyo state and born to a father who was
a politician and a mother who was a textile store merchant.
In the early 70’s, I left home for the U.S and it was
the first time someone in my family would go overseas. I moved
to Georgia in 1971 and attended Fort Valley State College,
a historical black institution known for its biology and chemistry
departments. I later moved to the Texas Southern University
where I graduated with a Bachelor of Science degree in Chemical
Engineering and later at the Prairie View University in Texas,
where I bagged a Masters in Business Administration, specializing
in Finance and Marketing.
Upon graduation, I worked for Shell Oil as a chemical engineer
and as a research chemists at Halliburton. Over the next decade,
besides founding Camcac and Allied Energy, I would also hold
several positions within the oil and finance industries, including
executive positions at Suncrest Investment Corporation and
Baker Investments.
The turning point for the company came when in 1989, Dr. Rilwanu
Lukman, then Foreign minister of Nigeria who later became
secretary general of OPEC visited Houston. At a Rotary club
meeting, Lukman told me the Nigerian government wanted to
spur development of a local energy industry.
It was an opportunity that I grabbed and launched into the
Nigerian oil and gas industry.
The Nigerian government asked me to try to organize Nigerians
in the U.S who were working for oil companies and would be
interested in being technical partners with indigenous companies.
In that process, I realized that I could use my knowledge
in America and that of Africa to gain much bigger foothold
in the industry. In 1991, I signed several deals with major
oil companies that would pave the way for the success that
I enjoy today.
The best way for me to get into the industry was to know what
the big boys wanted, the major oil companies. I started asking
questions. Did they have an interest in West Africa? If they
did, I would go to west Africa and look for what they wanted
and made it available for them. I understood the political
landscape and business environment in those countries in Africa.
When you merge those two together, there was a good synergy
that was very attractive to the major oil companies.
The oil and gas industry
The quest for oil and gas is one that requires men with the
heart to take risks. Sometimes people think I am crazy because
I can sink in $40million looking for oil or gas. But if you
get it, if you are able to get the reserves and strike the
oil, it pays for all the other times you were unsuccessful.
It is an interesting business to be in.
The oil and gas business does not know colour. It is about
your success in drilling and being able to find reserves.
The industry is a cyclical one. The cost of finding oil rises
and falls in tandem with that cycle. While the price of crude
oil has risen about 300 per cent over the last couple of months,
the cost of exploiting crude oil has also escalated more than
100 per cent. For instance, there was a case where we signed
a lease for a semisubmersible rig that can drill as deep as
12,000 feet to the seabed.
The cost was $320,000 per day. That rig came off of contract
at $127,000 per day. Suppliers are in that cycle now where
they can make all the money they can because they know if
oil goes down to say $15, they are going to market those same
rigs for $70,000. Oil drilling is a risky business; it cost
a lot to drill an exploratory well. To defray those costs,
we partner with some other firms. We can go into partnership
where we own the actual field and we’ll share in the
profit, but they put up the up-front capital to actually go
in and drill the exploration well.
About Allied Energy
Allied Energy undertakes upstream oil and gas exploration
and production activities in Nigeria. We were one of the first
independent energy enterprises to realize the potential of
west Africa’s offshore resource.
We were not only the first independent oil and gas producer
to hold interest in a Nigerian deepwater licence in 1992,
but also the first to make a deepwater discovery in offshore
in 1995.
Currently, Allied Energy is engaged in production activities
centred on oil block in which the first deepwater offshore
discovery in west African was made.
Let me get deeper by listing some of our operating landmarks.
Allied Energy and BP Stateoil became the first oil consortium
to discover a deepwater well in West Africa and the first
to discover oil in deepwater west Africa. In 2005, the company
signed a joint production sharing agreement with Nigerian
Agip Exploration. The agreement awarded Agip a 40 per cent
participation in Oil Mining Leases (OML) 120 and 121. Allied
Energy and Agip will collaborate on the technical assistance
and operations management of the blocks.
Recently, Allied Energy bid and won two new prospecting licences
in the 2005 bid round. The winning bids include the rights
to a 54 per cent interest in Oil Prospecting Licence 278,
which is located onshore in the Niger Delta basin on the Niger
Delta continental shelf zone.
Going to the Nigerian Stock Exchange
We will be going public soon as we plan to get enlisted on
the floor of the Nigeria Stock Exchange (NSE) before the end
of 2008.
That will make Allied Energy the first upstream company to
seek a listing on the Nigerian stock exchange. We will use
the proceeds of the offer to increase production and to improve
shareholders yield. We intend to pay dividends after 12 months
of operation and that is if listed and granted permission
by SEC.
We intend to bring in more foreign direct investments into
Nigeria to increase our capacity. We also want Nigeria to
share in the successes that we have achieved outside. And
this will create a lot of employment opportunities to Nigerians.
We want to utilize our local and international resources to
efficiently explore our oil assets and this will not only
benefit our shareholders but also our country as well.
This will be pivotal to the way we do business and it underscores
Allied Energy’s commitment to empower our people with
our success story, a success for Nigeria.
Our commitment over the years remains unchanged– to
continue providing the very best in oil prospecting and development
services in Nigeria.
I give credit of my business success to one of my mentors,
Reginald Lewis who was the founder of TLC Beatrice Lewis.
He took me under his wings and taught me the ins and outs
of American business. In 1991, one year before he died, he
gave me a lesson in business that I will always remember.
He was full of encouragement and inspiration. He told me not
to get deterred or inhibited by lack of financial resources.
Just have the courage to go out there to meet with people,
to tell people what you want to do, what you are trying to
do and what you can do.
For us it was knowing the intricacies and what major companies
look for. We thought if we had something that they wanted,
then finding money would not be a problem anymore.
And using that knowledge and the connections that I had while
advising the major companies, I got the financial backing
that had eluded me, and successfully put in my own bid at
a deep water auction and I won and instantly became a player
in the oil and gas industry. |
