uniport-ips grad presentation-final-nov 30 2011
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Ethics & ProfessionalismEthics & Professionalism
In The Nigerian Oil & Gas IndustryIn The Nigerian Oil & Gas Industry
Presented byPresented by
Dr Jude O. AmaefuleDr Jude O. Amaefule
Vice Chairman/CEOVice Chairman/CEOEmerald Energy Resources LimitedEmerald Energy Resources Limited
Lagos, NigeriaLagos, Nigeria
AtAt
The Institute of Petroleum Studies, IPS
University Of Port HarcourtPort Harcourt, Rivers State
November 30, 20111
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Protocols & Presentation Summary
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The Global Energy Challenge
World energy supplies need to grow toWorld energy supplies need to grow tomeet humanitys globally growing energymeet humanitys globally growing energyneedsneeds
The global energy industry has theThe global energy industry has thechallenge to meet those needs in a waychallenge to meet those needs in a way
that is safe, secure, affordable,that is safe, secure, affordable,honest, and environmentally responsible.honest, and environmentally responsible.
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Meeting the Challenge
E & P companies continue to discoverE & P companies continue to discovercommercially producible oil and gas incommercially producible oil and gas in
sizeable quantities around the worldsizeable quantities around the world Continuing technological innovationContinuing technological innovation
enable E & P companies to locate andenable E & P companies to locate andeconomically develop new fields, and toeconomically develop new fields, and to
extend existing fields and increaseextend existing fields and increaseefficiencies in themefficiencies in them
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TheM
ost Rewarding ProfessionE & P companies play a critical role inE & P companies play a critical role in
meeting humanitys rapidly growingmeeting humanitys rapidly growing
demand for oil and gas.demand for oil and gas.The best E & P companies consist of teamsThe best E & P companies consist of teams
of professionals who enjoy meeting thatof professionals who enjoy meeting thatneed by combining honesty and integrityneed by combining honesty and integrity
with the daily pursuit of technologicalwith the daily pursuit of technologicalinnovation and operational excellenceinnovation and operational excellence
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Some Recent Supergiant
Finds Around the WorldYear Name Location Size
2010
2010
20102009
2009
2009
2008
2007
2001
20002000
Perla
Windjammer. etc.
LeviathanPoseidon
Tiber
Lake Albert
Carioca
Bohai Bay
Azadegan
KashaganAbadi
Venezuela
Offshore Mozambique
Offshore IsraelOffshore Australia
Gulf of Mexico
Uganda
Campos Basin, offshore Brazil
Offshore North East China
Iran
Offshore KazakhstanOffshore Indonesia
16+ TCF
3-4 TCF
16+ TCF7.6 TCF
3 BBO
2.5 BBO
10-33 BBO
7.5 BBO
26 BBO
9-11 BBO5+TCF
Source: Signet
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The outlook is bright
globally Many regions with large potentialMany regions with large potential
additional oil and gas reserves remainadditional oil and gas reserves remainunderexplored or unexploredunderexplored or unexplored
Selected underexplored
regions
Location Potential additional
reserves
Gulf of Mexico
Santos/Campos/Espirito Santo
West Siberian Basin
Nile/Levant BasinsCaspian Basin
Southern Georgina Basin
Southeast Asia
Offshore Mexico/USA
Offshore Brazil
Russia
Eastern MediterraneanCentral Asia
Australia
Indonesia/China
20 BBO
123 205 BBO
145 BBOE
68 BBOE60 BBOE
27.5 BBO/BBOE
73.6 BBO/BBOE
Source: Signet
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at our front door, Africa Has
Great HC Potential - 1
Source: USGS
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at our front doorNigeria is
Relatively Underexplored - 2
Source: USGS
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at our front door- 3
Source: HRT Participacoes
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and in our backyard
Source: USGS
Sud Province, North-Central Africa:
7.31BBO, 13.42 TCF, 353 MMBO NGL
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Crude Oil Production
by Region-Last 30 Years
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Key LessonsKey Lessons
ForwardForward--thinking E&P companies focusthinking E&P companies focuson buildingshareholder value,andon buildingshareholder value,andknow that best practices is theknow that best practices is thefoundation for long termsuccessfoundation for long termsuccess
Excellenceand integrity inall aspectsExcellenceand integrity inall aspectsof theiroperations, beinggoodof theiroperations, beinggoodemployers,and beinggood citizens inemployers,and beinggood citizens intheir host communitiesaremanifestedtheir host communitiesaremanifested
in higherreturnsonassets, lowerin higherreturnsonassets, lowerproduction costs, bettersafetyrecords,production costs, bettersafetyrecords,which will create betterprofit margins.which will create betterprofit margins.
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Wealth Creation TriangleWealth Creation Triangle
TECHNOLOGYTECHNOLOGYCAPITALCAPITAL
RESOURCESRESOURCES
Nigeria Has Abundant Resources, Limited Technology & Inadequate CapitalNigeria Has Abundant Resources, Limited Technology & Inadequate Capital
WEALTH($$$)WEALTH($$$)
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Banking/Finance
Insurance
Petrochemicals
Agriculture
PharmaceuticalsEducation
Manufacturing
Power
RefineryFuels
Infrastructure
The Petroleum Industry Drives The Nigerian EconomyThe Petroleum Industry Drives The Nigerian Economy30% GDP; 85% Govt Revenue; 95% Of Foreign Exchange30% GDP; 85% Govt Revenue; 95% Of Foreign Exchange
$$$
Oil & Gas
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Summaryof E&P Challenges In Nigeria
YouthYouth restivenessrestiveness && lacklack ofof hosthost communitycommunityempowermentempowerment
HighHigh CapexCapex && OpexOpex
LowLow Nigeria/LocalNigeria/Local contentcontent
LackLack ofof SustainedSustained rulerule ofof lawlaw (sanctity(sanctity ofofcontracts,contracts, regulationsregulations && legislation)legislation)
HighHigh costcost ofof projectproject financingfinancing
LowLow humanhuman capacitycapacity developmentdevelopment
LackLack ofof ethicsethics && integrityintegrity
EnergyEnergy PovertyPoverty PoorPoor CorporateCorporate GovernanceGovernance
InadequateInadequate CapitalCapital
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Business Drivers of theBusiness Drivers of the
Oil & Gas IndustryOil & Gas Industry Reserves Replenishment &Reserves Replenishment &
GrowthGrowth
Productivity EnhancementProductivity Enhancement
Reserves/Production RatioReserves/Production Ratio Return On Assets (ROA), ReturnReturn On Assets (ROA), Return
On Invested Capital (ROIC),On Invested Capital (ROIC),
Return On Equity (ROE),Return On Equity (ROE),
Net Present Value (NPV) &Net Present Value (NPV) &
Expected Monetary Value ( EMV)Expected Monetary Value ( EMV) Earnings Per Share (EPS)Earnings Per Share (EPS)
GrowthGrowth
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Oil & Gas: Value CreationOil & Gas: Value Creation
Value creation is theValue creation is theoptimal useof time,optimal useof time,moneyandmanagementmoneyandmanagementtoeffect possiblegrowthtoeffect possiblegrowthinassets, cash flowandinassets, cash flowandprofits.profits.
ValueValue canonly becanonly becreated inasustainedcreated inasustainedmanner inanmanner inan
environment ofenvironment of IntegrityIntegrityand Excellencemarked byand Excellencemarked byMutual Respect,Mutual Respect,Responsibilityand TrustResponsibilityand Trust
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Ingredients for Reserves Growth,Ingredients for Reserves Growth,
Productivity & EMV EnhancementProductivity & EMV Enhancement
Technology + Human Capital+SkillsTechnology + Human Capital+Skills=Knowledge=Knowledge
Knowledge + ValueKnowledge + Value--LeadershipLeadership+Integrity = Excellence+Integrity = Excellence
Operational Integrity +ExcellentOperational Integrity +Excellent
Management = EMV EnhancementManagement = EMV Enhancement
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SPE CORE VALUESSPE CORE VALUES
Stewardship.Stewardship.
Integrity.Integrity.
Safety.Safety.
Accountability.Accountability.
Excellence.Excellence.
These five simple values areThese five simple values aremeant to be our guidepostsmeant to be our guidepostsfor every action we take asfor every action we take asemployees or boardemployees or boardmembers.members.
They give us a shared set ofThey give us a shared set of
principles and beliefs.principles and beliefs. They are not overlyThey are not overly
complicated and do not needcomplicated and do not needa great deal of explanation.a great deal of explanation.
In most ways they speak forIn most ways they speak forthemselves, but they are verythemselves, but they are verypowerful reminders of ourpowerful reminders of our
obligations to each other, toobligations to each other, toour customers, to ourour customers, to ourshareholders, and to theshareholders, and to thecommunities where we livecommunities where we liveand work.and work.
(Source: SPE)25
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Preamble -- Engineers recognize that the practice of engineering has a
vital influence on the quality of life for all people. Engineers shouldexhibit high standards of competency, honesty, integrity, and impartiality;be fair and equitable; and accept a personal responsibility for adherenceto applicable laws, the protection of the environment, and safeguardingthe public welfare in their professional actions and behavior. Theseprinciples govern professional conduct in serving the interests of thepublic, clients, employers, colleagues, and the profession.
The Fundamental Principle -- The engineer as a professional isdedicated to improving competence, service, fairness, and the exercise ofwell-founded judgment in the ethical practice of engineering for all who
use engineering services with fundamental concern for protecting theenvironment and safeguarding the health, safety and well-being of thepublic in the pursuit of this practice.
SPE Guide for Professional Conduct
26
(Source: SPE)
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Why Ethics and Engineering
The engineer as a professional is dedicated toThe engineer as a professional is dedicated toimproving competence, service, fairness, andimproving competence, service, fairness, and
the exercise of wellthe exercise of well--founded judgment in thefounded judgment in theethical practice of engineering for all who useethical practice of engineering for all who useengineering services with fundamentalengineering services with fundamentalconcern for protecting the environment andconcern for protecting the environment and
safeguarding the health, safety and wellsafeguarding the health, safety and well--being of the public in the pursuit of thisbeing of the public in the pursuit of thispractice.practice.
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Some Definitions
A.Ethics: Behavioral principles for satisfying morals;implies standards of conduct, duty and choices;
Obedience to the Unenforceable.
B. Professional: A person who is highly accomplished in a
specialized occupation to earn a living; implies learnedstudy, personal dedication, service to mankind, and highstandards of conduct.
C.Morals: Core values for living, relative to what is right,
good or proper.D.Manners: Personal behavior in public; Not making the
people around you uncomfortable . (Source: Peter Rose 2004)
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Some Definitions
E. Integrity: Soundness of moral principle; the character of uncorruptedvirtue, especially in relation to truth and fair dealing; uprightness,honesty, sincerity.
F. Conflict of Interest: A situation wherein an individual or organization
understood to have accepted responsibilities on behalf of others, findsits fiduciary duties compromised by co-existing opportunities from whichit could privately benefit and/or damage the interests of those who areostensibly being represented.
(Source: Peter Rose 2004)
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Common E&P Ethical IssuesCommon E&P Ethical Issues
Simple FraudSimple Fraud
Conflicts of InterestConflicts of InterestAbsence of ObjectivityAbsence of Objectivity Misuse ofBest PracticesMisuse ofBest Practices Improper Use of a Professionals Work by OthersImproper Use of a Professionals Work by OthersViolating ConfidentialityViolating Confidentiality Outside Employment/Activities (Moonlighting) GreedGreed
(Source: Peter Rose 2004)(Source: Peter Rose 2004)
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Ethics: Decision Framework
Ask yourself:Ask yourself:
Would the resulting action be legal?Would the resulting action be legal?
Would stakeholders see the action as responsibleWould stakeholders see the action as responsible
stewardship?stewardship? Would I feel good about the resulting action?Would I feel good about the resulting action?
Would I mind having information regarding theWould I mind having information regarding thedecision publicized?decision publicized?
Have I consulted with peers/others regarding theHave I consulted with peers/others regarding the
perceived action and possible ramifications?perceived action and possible ramifications? Would the public view the perceived act as aWould the public view the perceived act as a
responsible professional action?responsible professional action?
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Recognize Inherent FiduciaryResponsibility
Honor Professional Tenets:
Objectivity
Technically Current
Thoroughness
Candor
Team Work
Inescapably Tied to Ethics
Obligations of E&P ProfessionalsObligations of E&P Professionals
32(Source: Peter Rose 2004)
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Greed And Corruption
It is normal to want to enjoy the materialfruits of your honest labors. That is verydifferent from greed.Greed is not normal. It is the sinful,excessive and rapacious desire for wealthand possessions.Greed fuels corruption, which is theperversion of integrityCorruption insidiously undermines trustand faith in institutions, and rends oursocial fabric
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Post Graduation Challenges
and Opportunities Employability
Employment/Remuneration/Productivity/JobSatisfaction/Promotion & Job Security
Family/Marriage/Spouse/Children/Family Care & Responsibility
Prosperity & Wealth Creation
Societal Expectations & Management
Food Security
Energy Poverty
Population Growth & Competition for Jobs
Global Warming/Environment and Health
National Economic Growth
Explore opportunities as Technopreneurs
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BrightCareers
Excellence&
Innovation
Fairness, Trust,
Integrity
Commitment &
Loyalty & Trust
Reasonable Job Security Long-Term Viability
Financial Compensation Commercial Success
Individual Interest Corporation Interest
Source: JPT, January 07 (fig.3 pg 17)
Alignment of Corporate and Employee InterestsAlignment of Corporate and Employee Interests
Enhances Value CreationEnhances Value Creation
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Lasting Thoughts to Remember YourYour degreedegree isis aa passportpassport toto adventure,adventure, notnot
thethe adventureadventure itselfitself
UseUse youryour degreedegree andand everythingeverything youyou learnlearnonon thethe jobjob andand inin lifelife toto bebe aa betterbetter
professionalprofessional andand aa betterbetter colleaguecolleague EveryEvery dayday youyou shouldshould bebe energizedenergized toto meetmeet
andand surmountsurmount challengeschallenges
RemainRemain restlesslyrestlessly curiouscurious andand enthusiasticenthusiasticaboutabout thethe remarkableremarkable worldworld wewe livelive in,in, andandwhatwhat youyou cancan dodo toto makemake itit betterbetter placeplace forfor
youryour generationgeneration andand youryour childrenchildren andand theirtheirchildrenchildren whowho willwill followfollow youyou:: makemake themthemproudproud
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Moral Behaviour & Excellent SuccessTheThe most most admiredadmired andand successfulsuccessful
companiescompanies inin thethe worldworld protectprotect andandbuildbuild theirtheir reputationsreputations everyevery dayday bybyservingserving humanhuman needsneeds withwith reliablereliableproducts,products, byby developingdeveloping andand caringcaring forfortheirtheir employees,employees, andand byby beingbeing goodgoodglobalglobal citizenscitizens
CorruptionCorruption andand moralmoral shortshort--cutscuts arearerepellentrepellent toto theirtheir corporatecorporate DNADNA
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With His loving kindness and His mercy, the
Good Lord created and blessed each of us witha certain element of creativity
Matthew 22;36-40:
Teacher, which is the greatest commandment in the Law?Jesus replied: Love the Lord your God with all your heart and
with all your soul and with all your mind. This is the first andgreatest commandment. And the second is like it: Love yourneighbor as yourself. All the Law and the Prophets hang onthese two commandments.
IfIf youyou taketake toto heartheart andand livelive thosethose twotwo commandmentscommandments everyeverydayday of of youryour life,life, youryour lifelife willwill bebe immeasurablyimmeasurably enrichedenriched byby
thosethose youyou meetmeet onon youryour lifeslifes journey,journey, regardlessregardless ofof theirtheirbackgrounds,backgrounds, asas yoursyours willwill bebe byby theirstheirs
LoveLove ofof thethe LordLord andand treattreat youryour neighborsneighbors withwith love,love, respect,respect,consideration,consideration, trusttrust andand integrityintegrity
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OnceOnce youyou getget employedemployed inin thethe OilOil andand GasGas Industry,youIndustry,you
mustmust endeavourendeavour toto avoidavoid CorruptCorrupt practicespractices suchsuch asas briberybribery
fromfrom ServiceService Contractors,Contractors, OwnershipOwnership ofof privateprivate ServiceService
Companies,Companies, abuseabuse of of thethe biddingbidding processprocess inin thetheprocurementprocurement ofof goodsgoods andand servicesservices
EnsureEnsure && PreservePreserve IntegrityIntegrity ofof LeadershipLeadership;; PersonnelPersonnel;;
SystemsSystems;; ProcessesProcesses && ProceduresProcedures
DontDont CompromiseCompromise ExcellenceExcellence forforM
ediocrityM
ediocrity andand PreservePreservethethe tenetstenets ofof OurOur GreatGreat ProfessionProfession
AcquireAcquire wealthwealth honestlyhonestly andand bebe charitablecharitable
Concluding RemarksConcluding Remarks
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If a Village Boy Like Me Can Do It With
Ethical Behaviour, Integrity &
Professional Excellence , You Can
Definitely Do It Better With
Mutually Assured Respect,Responsibility & Trust (MARRT)
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QUESTION & ANSWERS
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