When Nigeria emerges from recession, the way we do business must change forever. This does not just mean an emphasis on diversification; though as the recession has bitten over the last 12 months, the need for diversifying the source of government revenues and our export base has never been more urgent. It means changing the fundamental approach that we – businesses – take to managing the primary fuel of our economic growth: oil.
Whilst there is nothing desirable about the hardships placed on businesses and their loyal employees in times of recession, one cannot deny the cleansing effect of the economic cycle. Recessions force businesses to identify, eliminate and fortify pockets of previously inefficient activity. Fat is cut, waste is curtailed and sweeping efforts to streamline are pushed to front of the queue.
The businesses which will not adapt rarely survive the downturn. But those who do emerge, emerge in a win-win situation. Not only are they more dominant in the market – a position which they then have to defend against newer entrants in the upturn – but through the newly found efficiencies, they are leaner and therefore more profitable.
It is a lesson that I have learned from personal experience across my career, so agility is one of the central principles on which I build my businesses today. And at Aiteo, the oil company I founded in 2008 which is now Nigeria's largest, those foundation principles are bearing fruit. Despite adverse market conditions, with the oil price collapse and militant vandalism, our subsidy Aiteo Eastern Exploration and Production Company has trebled output just 12 months from 23,000 barrels per day (bpd) to 90,000 in one of Nigeria's most strategically important oil blocks, OML 29. And this month we announced a further $4 billion medium term investment aimed at boosting both gas and oil output by, amongst other tactics, bolstering infrastructure asset integrity.
The strategy we employed to get to this position is one that is changing the business landscape in Nigeria, and one that will act as a model across sectors and across the African continent. The macroeconomic environment we were faced with upon the award of OML 29 was intensely challenging, but we knew that the production potential of the asset was multiples higher than the output at the time, if we could put the right processes in place and bring the right local expertise to bear.
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