Ikpea: How Incoming Government Can Take Nigeria’s Oil Industry To Next Level

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In this piece, Dr Leemon Ikpea, the Chief Executive Officer of Lee Engineering & Construction Company Limited, shares his thoughts on the incoming federal government, the present and future of Nigeria’s oil and gas industry, the vital role played by the Nigerian Content Development & Monitoring Board (NCDMB) in deepening local companies’ capacities and creating a level-playing field for indigenous firms

Dr Leemon Ikpea, the Chief Executive Officer of Lee Engineering & Construction Company Limited, always dreams of a great Nigeria of equal opportunities for all in the private and public sectors and has spent several years in the oil and gas industry to deepen economic potential and prosperity across the country. A technocrat, Ikpea clearly understands the role of governance and policies, and he demonstrates this, in his optimism in the incoming administration to be led by President-elect, Bola Tinubu.

“I have been in Lagos for more than 20 years. I have been following the president-elect’s track record right from the beginning. Lagos is the face of Nigeria. You can see infrastructure and a lot of innovations in Lagos. I could envision the incoming administration of the president-elect performing very well,” Ikpea states.

There is a basis for that optimism.

“Apart from the president-elect’s track record, any human being that is highly criticised, and negatively spoken of, that individual, come what may, usually succeeds. The motivation to prove his critics wrong is very high. Those negative criticisms trailing him will serve as a wind in his sails,” the Lee Engineering honcho explains.

He adds, “I see this incoming government as the best government we would ever have in this country. Yes, it will be one of the best governments we have ever had in Nigeria because it has seen the mistakes in various sectors of past governments and the anger of Nigerians. I am sure the incoming government will put a smile on Nigerians’ faces. The president-elect engenders this confidence because he is an astute politician and administrator that can assemble a team to actualise his vision.”

Again, Ikpea points to the president-elect’s “vision for Lagos, which has made it the face of Nigeria,” stressing that Tinubu is expected to surpass whatever achievements past governments had recorded and adds: “I am very optimistic and wish him well. I have followed his trajectory for over two decades; I have seen his programmes, policies and their implementation. He has done well. He will yet do well as president. He will bring his experience to bear on Nigeria’s affairs fully.”

Turning the wheels around

The new government has a lot of work to do in the oil industry, Ikpea says. “But at the same time, the staff and the people in the industry are first-class personnel because they’re well-trained. I could tell because I have been in the industry for 47 years,” he emphasises. “I have been following them right from the beginning. Nobody could steal a kobo in NNPC because their procedures were very strict, with meticulous attention to due process. The NNPC has metamorphosed into well-structured organisations. It remains one of the best parastatals this country could ever have.”

The Lee Engineering CEO has a somewhat simple suggestion to keep the wheels of oil running.

“What I will suggest the incoming government should do: one, there is over 5,000km pipeline in this country. And these pipelines were laid in the late 1980s. Calculate the years: it’s more than 30 years. There must be corrosion. The same pipelines have remained. They have not been changed, resulting in oil loss and stealing because criminals exploit the corroded parts of the pipelines to siphon large-scale quantities of oil,” says Ikpea.

That leaves the government losing a lot of money. If the government could do the hard work, a lot could be saved for the nation’s coffers.

“It’s a lot of work to be done. If the government wants to avoid stealing, the pipelines have to be rejuvenated by fixing the badly damaged ones. They should create a good network of pipelines and bury them deeper into the ground. If the depth was three feet before, let them take it six feet down; that way, it becomes more difficult for potential oil thieves to unravel the pipelines and steal oil,” Ikpea notes.

He recommends high-powered surveillance that could nip criminal activities in the bud to make the hard work meaningful. He also believes careful consideration should be given to the pipelines and refineries.

“Along with that, there should be proper surveillance. They need to concentrate on the pipeline, and they need to concentrate on the refineries to ensure that the refineries are functional because if the refineries do not produce, we will continue to have problems. They should continue to pay subsidy,” Ikpea stresses.

The Lee Engineering boss will not recommend the removal of fuel subsidy, stating that “if they take out subsidy, only NNPC cannot pay the bills” and “it will be too heavy a burden to bear alone because the private sector will bring in petroleum products and sell at their own prices.”

Local content development

Ikpea’s focus remains on deepening the country’s success stories, facing the challenges and building bigger frontiers for national prosperity, stressing the matchless contributions of the Nigerian Content Development and Monitoring Board (NCDMB) to strengthening the hands of local players in the oil and gas industry.

He feels the NCDMB has a lot going for it and can only get better without undue interference and politicisation of the agency. Yet, Ikpea suggests the continued strengthening of the local content board for more successes to be recorded per indigenous capacity in the oil and gas sector.

“You know, the government should properly empower the local content board because they have limitations. More empowerment is needed in the local content board. They need competent people to run that department because that is the livewire of the generation yet unborn. The people who are there now, if I were the government, would give them another four years to put all the structures in place,” Ikpea reasons. “When they put the necessary structures in place, anybody coming in will have a well-established structure and system to work with. The personnel at the local content board are very competent and committed, but they need to be empowered.”

Another measure the Lee Engineering founder urges the government to consider regarding the local content board is consolidation.

“They should be given time to consolidate the structure being built by the board. The board is the future of Nigeria. It is the future of oil and gas. The local content board is training a lot of Nigerians. The skills and capacities of Nigerians in the oil and gas sector have continued to increase,” Ikpea stresses. “The board is training a lot of Nigerians through Lee Engineering and other indigenous oil and gas firms.”

Established in 2010 by the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, the NCDMB is to make procedures that will guide, monitor, coordinate, and implement the provisions of the NOGICD Act, signed into law on April 22, 2010, by then-President Goodluck Jonathan, giving birth to the NCDMB.

As a vibrant local player in a dynamic global industry, Lee Engineering has stepped up to the plate by acquiring marginal fields. By the time the company starts production, it will not need to import many resources into the country because it will use equipment manufactured in its fabrication plant, which is cost-effective. Ikpea will bring to bear his 14 years’ experience in the construction industry.

His leading indigenous EPCOM (Engineering, Procurement, Construction, Operation, and Maintenance) company, the Lee Engineering and Construction Company, has achieved several milestones and received numerous commendations, awards, and certificates from local and international organisations.

Ikpea also talks about the potential strides of Nigeria in the gas industry amid a challenging environment that pervades Europe as Russia continues its violent aggression against Ukraine.

“Nigeria is exploring several opportunities in the gas sector. Nigeria and Morocco recently signed an agreement on a gas pipeline project linking Nigeria to Morocco, which will also supply West Africa and Europe,” says Ikpea. “This 6,000-km project will cross 13 African countries along the Atlantic coast. From there, it will reach other parts of the world. That’s a huge step. In addition, other projects are going on in the country, including that of the NLNG.”

Notwithstanding that, he understands the country requires a huge financial outlay to fully develop the oil and gas sector and disclosed that the federal government and the NNPC are committed to exploring the gas potential.

“There are other gas projects about to take off. This is the time for gas; it’s the gas revolution,” Ikpea declares. “The federal government is very serious about it; the NNPC is serious about it too. Nigeria is in the gas revolution. Nigeria has started, and the NNPC has started.”

The oil and gas sector is one of the most critical sectors in the country’s economy, accounting for more than 90 per cent of its exports and 80 per cent of the federal government’s revenue. It is the ninth-largest global gas reserves with over 200 Tcf. As of 2019, Nigeria had Africa’s largest oil and gas reserves, with around 37 billion barrels of oil and 5.4 trillion cubic meters (bcm) of gas. With a production of 2.11 million barrels per day in 2019 (approximately 25 per cent of the total output in Africa), Nigeria continues to dominate Africa’s oil production.

The Lee Engineering firm, founded in 1991, has become a conglomerate dealing in retail, tourism, aviation, and manufacturing, including exploration and production. It has a fabrication workshop measuring 2,515sqm, complete with blasting/painting bays and state-of-the-art equipment. The company, Lee Engineering Group and Allied Companies Limited (including Lee Engineering, Tribet Ltd [travels and tours], Tribet Aviation, Tribet Purified Waters, and Lee Oasis), have at least 2,000 employees.