Uniport-ips Grad Presentation-final-nov 30 2011

8/3/2019 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

2DR JUDE O. AMAEFULE PRESENTATION AT-IPS UNIPORT NOV 30 2011


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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.

3DR JUDE O. AMAEFULE PRESENTATION AT IPS-UNIPORT ON NOV. 30 2011


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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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DR JUDE O. AMAEFULE PRESENTATION AT-IPS UNIPORT NOV 30 2011


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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.

27 SOURCE: SPEDR JUDE O. AMAEFULE PRESENTATION AT-IPS UNIPORT NOV 30 2011


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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?

31 SOURCE: SPEDR JUDE O. AMAEFULE PRESENTATION AT-IPS UNIPORT NOV 30 2011


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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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Documents

Uniport-ips Grad Presentation-final-nov 30 2011