Menu

“Our unique selling point is the speed and quality at which we can deliver production from challenging assets at relatively low unit costs.”

Addax Petroleum is a subsidiary of the Sinopec Group, one of the largest oil and gas producers in China, the biggest oil refiner in Asia and the third largest worldwide.  The company was founded to create value through an ambitious programme of exploration, development and production of oil and gas resources. However, a key part of the company’s mission was also to contribute to the socio-economic development of the communities where it works while maintaining environmental sustainability.

Addax Petroleum has made strategic acquisitions and reinvestments in Africa, the Middle East, the North Sea and many other areas supported by long-lasting relationships with all their stakeholders.

“We started business around the 6th May 1998 after we acquired assets from Ashland, a previous company and took over their contract in Nigeria,” remembers Chikezie Nwosu, Addax Petroleum Nigeria Limited’s Technical Director. “At that point the production levels of these assets were around 8,000-9,000 barrels of oil a day. Since then Addax Petroleum has quickly increased production, achieving a peak of over 110,000 bopd, because one of the great things about the company is its ability to find hydrocarbon resources, progress them to Final Investment Decision, and then turn these reserves into production very quickly.”

Operations in Nigeria began with the signing of two Production Sharing Contracts with the Nigerian National Petroleum Corporation. It became a flagship study in how Addax Petroleum works. Addax Petroleum drove growth by further developing these assets, focusing particularly on those that others had dismissed as having limited remaining production potential. From there the company leveraged their expert in-house talent pool of technical and operational knowledge to grow the reserves and production in these assets in a cost effective manner.

Today Addax Petroleum’s producing assets in Nigeria include 11 producing fields with approximately 80 producing wells in concession OML123, two producing fields with 17 producing wells in concession OML124, and another two producing fields with about 16 producing wells in concession OML126. The company is also continuing to progress with in-field exploration and appraisal activities and Field Development Planning that is expected to lead to a significant rise in both reserves and in production.

Chikezie tells us, “Starting from a reserves base estimated by the previous operators of about 70 million barrels of oil, we’ve produced over 400 million barrels of oil and have 2P reserves of an additional 400 million barrels, alongside 5 million cubic feet of 2C gas resources. We’ve increased production within that period to levels over 110,000 barrels a day.”

The Spirit of the Addax Petroleum

This has become Addax Petroleum’s hallmark. Find the assets that are deemed not valuable enough or too difficult to access to be worth exploiting, point as much technical expertise as you can at those assets and make the most of them.

“Our unique selling point is the speed and quality at which we can deliver production from challenging assets at relatively low unit costs,” Nwosu says.

The company gets its name from the addax, a type of antelope often found in Saharan Africa. It is a large bodied antelope with white to sandy fur and long, thin, horns that spiral back from their head. What makes the addax special is its ability to survive even the harshest environments as one of the most well adapted antelope for a desert environment, even being able to get most of the water it needs from the desert plants.

This level of adaptability is what makes the addax the perfect symbol for Addax Petroleum’s founders, as well as its ongoing culture. It brings the company closer to the continent where they started their operations and reflects Addax Petroleum’s deep and continuous attachment to the African Continent, but more than that, it symbolises the company’s ability to find local resources and transform them into enviable assets.

Talking about their operations in Nigeria, Chikezie explains, “The greatest challenge was taking over what most people considered to be marginal assets in a difficult environment; offshore assets with hydrocarbon resource volumes that are more typical of onshore assets - hence the requirement to be innovative and deliver projects at costs lower than for typical offshore projects.”

He’s proud of the results.

“What we’ve done demonstrates that that is doable. We’ve shown that through innovation we can reduce costs and therefore economically develop such assets. We have in-country and hands-on technical expertise and work collaboratively with our corporate team of technical experts in Geneva and Beijing. That’s important- our engineers go out and are active in the field; they don’t just stay at the office looking at data.”

They achieved this through a combination of technical expertise and effective partnership, as Chikezie tells us, “We managed this with the unique combination of our partnership with the government; on many projects, we do joint technical work with our counterparts in NNPC-NAPIMS, as they bring a broader range of experiences from their supervision of oil & gas projects. Where we can’t, for example, negotiate lower costs on our own we leverage on them to get favourable contractual terms.”

Getting Recruitment Right Every Single Time

Addax Petroleum as a whole employs over 1,100 people, working in Nigeria, Gabon and Cameroon to Geneva, Houston and Aberdeen. By the standards of the oil industry, it’s actually a fairly compact workforce, but for Addax Petroleum this just means they have to be even more thorough about who they hire.

“That’s the most challenging issue in the industry,” Chikezie admits. “We already have a good idea who we’re looking for. Not just technical and academic ability but the right balance of personalities. People who can work in teams are essential because these are small teams. We need self-starters who are professionally trained. Even if we take on a new graduate the first thing we do is expose them quickly to operational activities.”

This means that when it’s time to bring new blood into the company, only the very cream of the crop make it through to a position with Addax Petroleum.

As Chikezie says, “We have a very robust recruitment process. The last set we took in where from a pool of 25,000 people and we only took ten on board. We can’t afford to fail with respect to staff recruits. Bigger IOCs may be able to hire a lot of people, but the size of our operation means we need to get it right every single time.”

Values

One of the qualities that is most important in the people that make up Addax Petroleum’s team is their share shared sense of values.

“Our Corporate Social Responsibility is a big part of what we do,” Chikezie says. “We do a lot for the communities where we work, especially through educational programs, roads, schools, giving access to basic infrastructure such as clean water supplies. We’ve started a technical skills acquisition program, helping people build the required technical skills in the communities where we operate.”

The scope and nature of Addax Petroleum’s social projects are tailored to the specific characteristics of each community. Their work can be seen in Nigeria, Cameroon, Gabon, and the Kurdistan Region of Iraq. What they have in common is drive towards projects that will enable better access to medical care, primary and secondary education, and better living conditions. Whether they’re providing power generators, rehabilitating classrooms, introducing malaria prevention training or even simply building latrines and wells, they look at the community’s needs and find a way to meet them effectively.

“We’ve also launched a micro credit scheme, supporting small businesses here with loans,” Chikezie says. “We’re empowering the community itself. For a lot of the areas we operate in, agriculture is a basic part of the community’s economy, so it’s important to us to support that.”

To achieve the best results Addax Petroleum regularly hosts town hall meetings and local stakeholder consultations to help them identify projects that will reap the most benefits for the community, gathering information and evaluating needs. In Nigeria, that has led to projects such as assisting host communities in forming cooperative societies, such as the soft loans and micro credit schemes, and developing ophthalmologic campaigns that have benefited the communities of Izombe and Eziorsu in Imo State. Wherever they work, Addax Petroleum focuses on programmes and facilities such as schools, roads and clean water systems that will create an immediate benefit for the communities.

But for Addax Petroleum, Corporate Social Responsibility isn’t just a set of charitable side projects. It’s also intrinsic to the way they do business, particularly in their efforts to make sure that the wealth they generate goes to the communities in the regions they earn it from.

“We have worked hard to grow our indigenous content ability,” Chikezie says. “70 to 80% of all our projects are Nigerian content compliant. We’re driving forward with Nigerian content. Addax Petroleum is a champion in an SPE wide program to get oil companies to support indigenous research and development efforts.”

These are just symptoms of the core values that run throughout the company. These values build the cultural context that allows Addax Petroleum to evolve, define how its employees interact with each other, and shape the attitudes adopted towards all the company’s stakeholders.

The company promotes a respect for people and cultural diversity which forms the bedrock of Addax Petroleum’s principles. It is essential to developing and maintaining effective relationships, mutual trust and confidence. A cornerstone of Addax Petroleum’s dynamic and sustainable growth is that the company fosters a spirit of harmonious cooperation among employees, individually and collectively.

The employees themselves are an invaluable part of that, and their input is sought through internal surveys to identify some common themes that Addax Petroleum has taken to heart as their core value for all working relationships, internally and externally, and they promoted vigorously through the company.

These values include, “Integrity through Action”. This means Addax Petroleum conducts their business ethically with a culture of accountability running from the shop floor to the top floor. Addax Petroleum considers itself responsible for working in full compliance with industry standards, with the rules, regulations and laws of their host countries and their own principles and processes. Then there is the value of “Harmony through Diversity”, a concerted effort by Addax Petroleum to build a culture of inclusion in the company, and a supportive and collaborative work environment. Addax Petroleum draws its talent from a range of diverse cultural backgrounds, but their relationships are based on respect and trust, leveraging the uniqueness of every employee to strive towards their common goals.

Finally, Addax Petroleum believes in “Value Creation through Excellence”. This means offering a consistent performance that delivers not only economic results but also social progress. Addax Petroleum is results orientated and everything they do is an effort to achieve excellence, provide high quality work, high returns to the host government, and make a positive impact on society.

Hope for the Future

Addax Petroleum has achieved a great deal. It’s done this through hard work, an absolute adherence to excellence, and through finding value whether others wouldn’t think to look. What’s more, it’s taken that success and invested heavily in the communities that made it possible in the first place.
Looking to the future, it’s not hard to see that it’s going to contain more of the same. The petroleum market has been volatile of late; enough to make some in the industry nervous, but Addax Petroleum is more than up to the challenges ahead.

“These are challenging times, but not impossible times,” he stresses. “What we need to do is continue our practice of driving down unit costs.”

The truth is that Chikezie doesn’t see these challenges as anything new, and he’s philosophical about the rises and falls in the industry’s fortunes.

“We take the challenges as they are,” he says. “If you work in the industry long enough you see these cycles of prices and it’s really survival of the fittest. One thing we try to do is collaboration, in any environment you have to collaborate with other oil companies and stakeholders, and we’ve found that those collaborations are a big part of the success we’ve had driving down our costs.”

Editorial contributed by Business Focus Magazine www.businessfocusmagazine.com