Sometime last week, I was priviledged to meet the graceful Mrs. Folorunsho Alakija, Nigerian billionaire businesswoman, philanthropist and Africa’s second richest woman. I spent over 3 hours in her office where we had some interesting conversations. I find the story of her life and acquisition of her oil blocks hugely instructive and thought to share some with you below.
It didn’t begin all rosy for her, either. In her own words, she narrates how, despite spotting key loopholes in the petroleum sector, doing stressful paper works, documentations et al, they were declined operating license on several occasions. It’s quite a long read, but the lessons are worth the time. – Isaac Oladipupo
Our foray into the oil business was not at all planned. Like so many other things in life, God ordained this venture through grace. In January 1991, a friend approached us with request for assistance with the sourcing of Nigerian crude oil for export to America by an American company. We sought an appointment with the Nigerian Petroleum Minister, who explained that there was very little margin for lifting crude oil, and that the company should be invited to invest in Nigeria instead of exporting oil to America. We delivered the invitation to invest locally, but the American company declined the offer.
Out interest in the Petroleum industry now roused we offered that the company would facilitate the transportation of crude oil from one location to another. The Petroleum Minister turned us down again, this time on the basis that pipelines would soon be laid and render the service obsolete. On a third visit, we came armed with an introductory letter offering catering services to oil rig workers, but this time the Minister advised us on the Federal Government’s interest in developing the Nigerian petroleum industry by using indigenous concessionaires to facilitate and boost the transfer of oil exploration and production technology to Nigerians.
We were quite discouraged and felt we were being politely told that the oil business was not meant for small fries like us. After the initial shock, we braced up and went back to the drawing board to take up the challenge. After a steep learning curve, we began to look for partners, as we neither had the millions of dollars required nor the technological expertise to even know where to begin our foray into the oil business. We eventually found a Scandinavian company willing to team up with us, and we applied for an Oil Exploration License for several oil blocks we would explore.
The application process took so long that the holders of the post of Petroleum Minister changed twice, and we had to reapply several times. About a year and a half later, in mid 1992, an acknowledgment finally came. But the actual application process required so many documents that we went through many sleepless nights, offered several prayers and even fasted for many months before the license was finally granted towards the end of the third year, in 1993 precisely, to the glory of God.
On close examination, we realized that we had the license to a block no oil company had really wanted. Our oil block had originally been allocated to a multinational oil corporation, StatOil, which had rejected and returned it to the government. That is no surprise to me now – it was a deep water off-shore block of over 1,500 feet deep. This meant exploration was too expensive; in fact, at the time, the technology necessary to reach that water depth had not even been invented. The license therefore seemed worth no more than the paper it was written on. Though licensed in 1993, our company did not commence full operations until 1996 under the name of Famfa Oil Ltd. In collaboration with Texaco Nig. Ltd., which was later taken over by Chevron and run by its affiliate, Star Deep Water Petroleum Ltd. despite its partnership with international oil companies, Famfa Oil Ltd. is a true family business. My husband, Modupe is Chairman, I am Executive Vice Chairman, and our four sons are Executive Directors. It is to the glory of God that I am the only female in a family concession of a world-class oil block.