Former Gulf Oil/Chevron top man, former chairman, Board of Trustees, Society of Petroleum Engineers (Nigeria Council) and Chief Executive Officer at Gacmock Nigeria Limited, an oil consultancy, Engineer Alexander Neyin, speaks with Gboyega Alaka on exploits in the Nigerian petroleum sector, his revolutionary role as a student and faceoff with the Gowon administration, which almost cost him his American scholarship and the politics that denied him the top job of Group Managing Director of the Nigeria National Petroleum Corporation, NNPC.
As an oil exploration expert, why do you think it has been impossible for Nigeria’s refineries to work?
The other day I appeared on a TV programme and they were talking about the refineries; and I said for more than 200 years, the average Urhobo man has been refining ogogoro; they didn’t read physics or chemistry; but they understand the principle of fermentation and distillation, where they take the ogoro (Pam wine), put in a place, leave it to ferment, put it in a drum, where they boil it and put a pipe from that drum through a cooling tank where they can be pumping water regularly; the discharge is the distillate, which is the ogogoro. The refinery is similar. It is just that you put the crude into a system and at different destinations, different products are being discharged. The lighter ends at higher temperatures; the heavier ends at the base. The problem we have is when you go acquiring technology all around the world, it becomes a problem to have a standard. Warri Refinery was built by Nuovo Pignone, an Italian company; you go to Kaduna Refinery, it’s another company; Port Harcourt, another; so there is no synergy. Besides, every refinery has continuous maintenance; you don’t wait until it dies out before you start talking about turnaround maintenance. In the US, I worked with Bay City Refinery, and most refineries are built like two hearts; so that when one portion is running, the other is being maintained. That way, there is no time you see a refinery going down the way it does here. And how do you even run a machine to the point that it becomes a liability that you park? Not even your car should be so treated. And when you park your car for about two to three months, you can imagine what will happen to the engine, not to talk of years. If we know what we’re doing, we have no business going through what we’re going through. If a government has four refineries and all the four are down, it tells volume of who we are. The Nigerian government in the past has spent money on engineering; I’m a product of that system. I was in University of Benin when I got a scholarship to go study Petroleum Engineering in the US without knowing anybody. That was when things were done on merit. If it was now that the US government says they need people, you’d see one highly placed person sending his son, whether he’s a Dundee United or not. And that does not give the desired result. So now, we are compromised to the extent that we cannot be boastful of the products that we have. All these things have fallen apart. So first and foremost, we must go back and fix our universities properly; and it begins right from the primary school level. Parents must also pay their part because parenting in Nigeria has gone to the floor. We talk about hoodlums here and there; who’s responsible? The parents. Today, these ones who have not gone to school and have not being well trained are busy multiplying children; what do you think will the final product? Today, the average Itshekiri girls that are smart are being married by other tribes.
How so?
The girls go to school and come out but the percentage of the boys who go to school is infinitesimal compared to the girls; so they get married to other tribes who have gone to school; and the uneducated get married to the uneducated. What do you think they’re going to produce?
What would you say amounted for this regression?
The regression is a result of the value system that has changed. The average Itshekiri man does not care whether you have money or not; it’s about your integrity. That’s what we grew up to meet as children. But things have changed; and this has affected the value system, such that everything is about money. Even here in Lagos, you go everywhere and see all sorts of people hailing you and shouting ‘Baba! Baba!!.
How long are you going to do ‘Baba’?
You’ve singled out parenting as a major cause of our retrogression.
Yes. In 2007, when I was to be made the Group MD of NNPC; the industry was shaking. I worked for Chevron, and I was one of the few people who refused to go and defend cost with NNPC because I knew what it was. I ran Gulf of Mexico in the US, and I knew how much it cost. But when I came in here, I saw that they were drilling the same oil, similar environment, with cheaper labour cost, at three times the price. So how do I join my company and go to NNPC to defend such a cost? I told the MD, anything about going to defend cost with government, I’m not going; but anything that is about going to defend the technical part of my job, count me in. And throughout my working career, I refused to go.
And that didn’t threaten your work and career?
Well, one of the things I did was make sure I’m an engineer through and through. So you cannot fault me technically. You can fault me by saying I’m not a good company man because I didn’t support these kind of things; and I didn’t care about that. And I used to tell them that all of us cannot be MD, and that there was no way Chevron was going to make a Nigerian MD in my time. As an Engineering Supervisor, the financial authority I had was as good as what a deputy MD in the company now has. If I said I needed this number of engineers to be trained, I never cared where they came from, I simply put my signature to their names. And once it gets to the Human resources, they never needed to get any clearance; they just approve and sent them. That was how we were able to train up some engineers. My target then was ‘let us work hard to domesticate the industry’. So this refinery thing that we are talking about is a disgrace, because it is not rocket science. It is what we can do. But will the government allow the right people there. You want somebody to do a job but rather than employ the right person, you start considering a senator’s son. So the job does not get done. Why, because you cannot give what you don’t have.
That’s really bleak, are you saying there is no hope for our refineries?
Well go to the refineries and see what is going on. They contracted the revamping to some foreign company. Last month I led a team of the Society of Petroleum Engineers to Warri Refinery to see the level of work done. What our people don’t know is that in any engineering field, outside or inside, there is always a point, where you need the manufacturing company. Usually, they’d put one small thing that would go bad and you would have to call them. You are supposed to put a Nigerian to mark the contractors who come to work there. That person is like an apprentice who takes a close look at what they are doing for possible takeover in the future. I did that for Chevron when they brought people in for a turnkey project. After commissioning, they were to be there for five years to run the place, so as the project supervisor I made a u-turn and picked some engineers and technicians and matched them two to each Whiteman as they brought the project for installation. Under six months, I set all the oyinbo operators free, because I no longer needed them. But there was a joker on that platform; we had four pumps to pump water from the sea, which we treated and injected into the reservoir to increase pressure to produce; each of those big pumps are down there, with the motor on top. Between the motor and the pump and the water is a two pair plastic put together, screwed on either side that keeps turning. They had calculated that every three or four months that plastic would wear out and need replacement; and each of those plastics cost about 25 thousand dollars. They gave us a lot of supplies when they came in, but they already figured, by their calculation, how long they would last us. Eventually those coupling got finished; but before they finished, I had told my people, ‘what is this? It’s a plastic holding the top and bottom’. So I flew down to the place, got thick rubbers, two pairs, drilled holes in them on both ends, put them together and fitted them. The one we did, for one year, didn’t share. Guess what! They started calling from their office that this particular stock was supposed to have been replaced and that if we didn’t replace them, it would damage the machine, bla ba bla. I told them we didn’t need it. They were calculating 25,000 dollars four times in a year, but I killed it off. So we had the rubber in our warehouse and it was cheaper. The place is still running till today.
And there was no backlash?
None, it was my project; theirs was to set it up; thereafter it’s my property. When you put a chain on my neck and decide to retain the chain, it’s my problem. Every engineer who is well trained must have done civil, mechanical engineering, all the small pieces in the first two years; even as a petroleum engineer, all those things will come handy at some point; when somebody brings something to you, with your residual knowledge, you should be able to question it, unless you just got the degree without really imbibing the rudiments. However, some of us went out to study engineering because we want to be engineers. So if you talk of electrical setting, I can contend with anybody, same with civil, mechanical…, to repair cars, turbine engine; I had to dirty my hands. I told myself I’m going to be a petroleum engineer, these are some of the basic things I need. And that’s why my company when they have big projects, they tell me, ‘Go and man this project’ – whether mechanical, electrical or whatever, my knowledge can challenge whatever you’re doing. So you give Warri Refinery that has sat down ten years to Dawood to fix, meanwhile, you that is giving the contract only has marginal knowledge on it; and that’s how you have a yoyo situation, because the people giving out the job to this company are not thorough, the companies themselves taking the job are not truthful. All they want is the money. In the end, it is garbage in garbage out.
You’re saying it’s a difficult situation even now?
Yes it is. By the time we finished, they said it would be ready by September ending; I said there is no way. That refinery cannot run; maybe in December it will be manageable. You won’t believe that refinery was set up to have carbon black petrochemical site, you have a kerosene site for jet fuel for aircraft and normal kerosene. Those units have never worked since they built that refinery. The petrochemical site never worked one day; and the petrochemical site is to get chemicals out of it, such as carbon black, so that you can manufacture tyres, plastics. What that means is that they import the thing they use in making all the plastics you see all over Nigeria. Some they bring them in ready-made and cut to the size or shape they want.
We are at a point where subsidy removal has become a big issue, is it really the way to go?
About four, five years ago, TVC, Channels TV interviewed me about this subsidy thing, and the question I kept asking was ‘who is subsidising who?’ Because the importers of the products are on one hand, the DPR people who approves and say ‘this is a quality product, this is the volume that really came in’ are on the other hand; the NNPC are on their own as well. So if somebody comes and says he’s bringing in 300million litres of petrol, the DPR is supposed to go out there and take the sample for test. Even that particular sample is supposed to have been tested and approved from the refinery were it is coming from. Is it Nigerian spec? Somebody says he is bringing 300million litres, meanwhile he’s bringing only 100 million. The DPR people know that the volume he’s bringing in is not 300milion but they close their eyes. So you’re paying subsidy on 300milliuon litres for 100milion litres. That’s what has been happening. In addition, when this 100million comes in, the regulators say the price is X, that price; but when it crosses the border to another country, it becomes times 2. The DPR people are supposed to follow the tanker to ensure it is delivered at the right place, but once the price is right, they put it on the road and take it to the border, escorted by the same Nigerian police or army, who are supposed to stop such a thing in the first place. The custom people also look the other way, thereby creating scarcity at home and allowing the prices to shoot up. They create scarcity and then sell at higher prices. If they hear that petrol is going to be 1000 naira next week, they close down their station, no fuel. It is the DPR that should go there with their long stick to ascertain, but would they do it? No, because those marketers would go to them in the office, give them ten million, and tell them ‘don’t go to this and this filling stations. That’s why you see all of them in NNPC and DPR driving cars outside their income. Same with the permanent secretaries. No permanent secretary earns half or one third of my salary when I was working, but they have a lot of buildings in Ikoyi and Abuja. Who’s questioning them? So really, it’s the corruption that was driving the subsidy regime.
Let’s talk about the Dangote/NNPC/ crude oil supply imbroglio; what do you think is the problem?
First and foremost, Dangote has no right to start saying the IOCs refused to give him crude. To start with, that is wrong. When you want to do a project like that, your source of crude for X number of years must have been keyed down with solid agreement. You also ought to have settled the matter of the people that are going to take the product from you. You put that together and come up with the economic plan of the project. If it does not jive, you don’t start. So a situation where you think you can build it and suddenly arm-twist the oil companies to say they are not giving you crude does not make sense. Nigerians don’t understand what is going on.
What are the advantages if we begin to refine here?
If we refine here, the cost of transportation of the refined product down to Nigeria is off. Te cost of transportation of the crude from here abroad is also taken off; and these are major costs. And if we begin to sell the refined product out, we make more money than when we sell just the crude. It doesn’t even make any economic sense to sell crude out, because it is more beneficial to refine the product and sell out. All the countries around Nigeria need the product; so you refine, sell out and bring in foreign money, thereby increasing our foreign reserve. These countries around us are also nearer.
There is also this outrage that the refineries have not being working for donkey years, yet the workers are being paid huge salaries?
That is why we say government has no business in business. If I have a refinery that stops producing anything, would I retain the workers? Of course not. Else I will have to go to the banks to borrow money to pay them. But because it’s government… They killed it; no income is coming, the overhead is fixed, you still have MD, deputy MD, managers, operations this and that; doing what? At best, I’ll call the staff and offer them one third of their salary pending when things would normalise again. And I can bet you that they would all work hard to ensure that things work, so they could start earning their full salary again.
You claimed in your autobiography, ‘I Dared To Explore,’ that you missed the Group Managing Director of NNPC job to tribalism; do you see it as a personal loss or as a loss to the country?
It’s never a personal loss. I don’t need the kind of money people need to live. People were telling me, ‘anything they tell you, just say ‘yes’,’ so that you can get the job. But I can’t do such. This face is always going to be this face. In the daytime, it is this face, at night or any other time, it will be this same face. I don’t want to get myself into those type of situations. God created mouth for you, and there is a limit to what your mouth can carry; if it’s too much, it will be discharged. Nigerians have to differentiate between their needs and wants. A country where people go for their wants and not their needs must be in this shape. Somebody who naturally cannot afford a two-bedroom wants to live in a duplex; he’s going to run into a problem.
So in you Nigeria lost a true Engineer/Administrator who would have impacted the system positively?
As far as I am concerned it would have been a different ballgame. First the 60/40 percent contract Nigeria has with the IOCs is with the assumption that we as Nigerians would own 60 percent while the IOCs, who are the operators, owned 40 percent. So the operator prepare a budget, which they bring to the government to approve. Now imagine that I don’t have the competence to go through that budget to see whether this is acceptable or not. Based on corruption, most of the IOCs would rather go abroad to discuss their budget with the NNPC – usually they go to Houston or London. Usually, it is the NNPC that suggests this, so that when they go, they get estacodes. Meanwhile the oil companies still go ahead to give them accommodation and feeding. So they get to pocket the estacode. In addition, the oil companies give some of the big boys 200,000, 500,000 dollars cash in envelops as gift. Who’s going to pay that money? It’s still part of the operations cost which the IOCs will remove, so they lose nothing. What I’m saying is that if you have 60 percent in a company and somebody owns 40 percent, you as a majority owner should be on top of the game. You should get some people from your side living in that company and working with them, to monitor what is going on.
Is it a systemic problem or a problem of competence or conspiracy?
All of the above.
You were active in the oil sector, are you saying you did not raise people to learn from you and impart your values?
That’s why I’m telling you that it would have been a show-stopper. I didn’t apply for the job, I just got a text message to send my CV. I had left Chevron and was working as Technical Director at Addax. Later I go another message: Please tell us what it will take to have NNPC operate like Petrobras or Aramco and the likes. So I put four pages. What are the things we needed to do? Because the NNPC as it was, was just a conduit, if you turn it to the likes of Aramcos of this world, then you can get Dubai and things like that. When they read it, it was like, this is it. But those who wanted the job badly were bribing Yar’Adua’s wife ten million, 20 million; then Yar’Adua was like, ‘what is in this job that people want it so badly?’ That was when he now got a British company to do an evaluation of the applications. They had eleven applications; at the end of the day, they came out with a list- I was number one. While all this was going on, I had no inkling; it was at the zero our that I got to know that they had stationed SSS people in my house in Warri, and at Addax Petroleum where I worked in Lagos.
And why would they do that?
When the information got out, the MD automatically sensed that this guy could be at risk once the information got out, so he called the security management to contact Panti and make sure they got some security people to keep an eye on me. So they were just hanging around, but they had their brief. Then I was invited to Abuja; and it was at that point that things started happening. E K Cark came up against my appointment because he thought I had a link with James Ibori and the late Olu of Warri, which was after Daily Independent, which Ibori owned, had come up with a damning front page story that so so so person was the next NNPC GMD and was being sponsored by himself, Uduaghan and the Olu of Warri. Meanwhile I had no link with Ibori. His uncle, Gilbert Iwere, was working in Warri Escravos as a warehouse supervisor and I was there as a superintendent. He worked for somebody who worked for me. So if I went to Gilbert’s house, I would see Uduaghan and Ibori there, and usually they would greet me ‘welcome sir uncle’, and that was it. It was a plot by Ibori to work up Clarke against me and it worked. Ibori actually wanted Mukoro, an Isoko guy, who worked with the NNPC. He knew that if he placed that in the paper, Clarke would take it up and Ijaw people would demonstrate. Clarke thought Ibori had stolen Delta State money, and he was going to put me there to continue stealing Federal Government’s money. So they demonstrated. They then put forward the argument if I was dropped, whoever would replace me must be a Niger-Delta man. EK Clarke then proposed his own man who had placed 8th in the assessment, but Yar’Adua said we cannot leave number one and take number 8; whatever issue you Niger Delta people have, you should go and sort it out, I am going to stick with number one. While this was going on, the Northerners went to him and put forward their own person, and that was how Abubakar Lawal Yar’Adua became GMD after Funsho Kupolukun.
Why was the conspiracy against you so strong?
They fear it wouldn’t be business as usual if I got in there. The IOCs were panicking; they were calling all the people they knew around me; some were calling my friends and relatives. They knew what they were doing. The NNPC people also knew what they were doing. How do you feel picking a tea-cup of money and letting go a drum to outsiders? The only person that has worked effectively in that place is Aret Adams. Most of the positive things you see, Aret Adams put them together. If Chief Aret got any money, it would be through charity, maybe somebody just said take for helping us. But for these guys, it’s conditional. Eventually, Hope Harriman went to E K Clarke and asked him, ‘where is the Niger-Delta man with this kind of qualification that you guys are opposing him? So E K Clarke insisted that I come and see him at Kiagbodo, his hometown. We all went- Rear Admiral Kpokpogri, Tunde Smooth, all the Niger Delta young boys joined in a convoy of 45 vehicles; we met EK Clarke. After a lengthy interview, he regretted his action and said it was because he didn’t know me. But the main thing was that this person was being sponsored by Ibori.
Could you recall the conversation with Clarke on that day?
He asked if I knew him and I said yes. He asked ‘how?’ So I started by telling him how on return from abroad he stayed on Robert’s Road in a two-bedroom apartment which doubled as his office and residence. I also told him about the girl he was coming to chase at Urhobo College. At that point, he shouted: ‘Indeed you know me. That girl gave me hard time. I asked ‘you want to know more? He said ‘yes’. I said when you were Commissioner of Education, you brought your in-law to be vice-chancellor in the midst of qualified professors from all over the Mid-West, even though he was the least qualified. I told him the students were going to take you on but I salvaged you by sending you a message not to come to the campus. (General laughter) He was shocked.
You almost missed out on the American scholarship to go study Petroleum Engineering abroad due to your activism in Revolutionaries Radicals.
Back in 1972, there were lots of things going on, which started making us feel like something had to be done that. When we got independence in 1960, the thought was that we were going to grow up into a great country. So by the time we got to the university and started seeing some of the manipulations, we started getting worried. But to challenge the wrong things in the university, you must be prepared, because they could use the lecturers to fail you and push you out. You have to be above par and very thorough in what your study. So we decided we were going to be a mouthpiece for people to see the good things and bad things. We fought against the initial concept of the NYSC, preferring the Israelis or American format, where they get one full year military training. That would serve as a good elite reserve of the armed forces for the country. But they were afraid that the number of elite reserve would over time outnumber the regular army and the idea of military coup would not work again. Eventually they adopted the Man O’ war format.
Then they used to rotate the Federal Executive Council meetings among the region; so when they held it in Benin, they were lodged at Palm Royal. Just as it is today, they would go to the universities to carry girls and position them in the rooms as cocottes for the governors, and pay them N3,000 at the end of the day. Back then, a Volkswagen was one thousand naira. Meanwhile, we were monitoring all these; we had the names of the girls and the amount they were given; so we cartooned them, using their names in disordered format, so they could not prove anything legally. So for weeks, shame would not let the girls come out. They would hold a state dinner for just about 100 persons a d quote N10million, when at that time, a three-course meal at the universities cost only 25k. And we wondered, ‘what were they eating?’ By that 1974, when we summarised what we’d seen since 1972, we came forward with ’25 reasons Gowon Cannot Rule Nigeria Beyond 1975′. As the scribe, no other person signed that document aside me. So when the scholarship came from the US State Department for me and eight others, they brought us to Lagos, put us in a hotel. They did passport for us; two days later, we all went back there to collect our passports but mine was not give to me. I then waited until they all travelled; the wait continued until one day, Chief OP Edodo, then a commissioner in Bendel State, saw me the hotel restaurant and wondered what a young boy like me was doing in the hotel. I told him, and he now gave me a note to Magnus Eweka, then a Commissioner of Police in Moloney and an old boy of Urhobo College who saved the situation. I filled the form that I was from OP Edodo and also an old boy of Urhobo College. It turned out that the document about Gowon that I had signed caused me to be blacklisted. Anyway, Eweka waved it, warned me to stay off such issues and facilitated how I got back my passport.
You weren’t pleased with your dad because he stopped your elder sister from going to School of Nursing.
That was one reason. I think he was fraudulent, and as a child, I recognised that. he was fraudulent in the sense that he had three kids: my elder sister, myself and my younger brother. He was paying for me going to Modern School. My mother paid for my sister. My mother’s expectation was that if she went to school properly, she would be a helper for her and the rest of us. Then you came and said ‘No’, she should get married. Some elders in the neighbourhood came in and helped them reach a compromise. My mum said she had spent money to get this girl through Modern school and she’d been given admission to School of Nursing; and that she wanted her to get that education and come back to help get her younger ones. You said ‘no, that you’d rather marry her out, and be responsible for these people going to school. And then when you succeeded in marrying her out, you never contributed in sending the younger boys to school. That was fraud. Even at that age, I had developed a phobia for dishonesty. Then, we already had the Professor Alele Williams. My mum never went to school, my dad went to school, he was chief clerical officer at PWD, so he should have a better understanding of education than a illiterate woman.
Tell us of your journey up the ladder from your scholarship years in the US.
Following my admission into the University of Benin, we went on holidays in 1974, came back in January to the news that the US State Department had given nine of us a scholarship to go and study Petroleum Engineering. The federal government needed petroleum engineers, since petroleum had become the mainstay of the nation’s economy. The idea was to have us come back and practise or teach in the universities. Then A&M University was the number one university in the world in Petroleum Engineering; still is; so as we were graduating, I had eight oil companies offering me jobs. I took a job with Gulf Oil in Houston. Because I’d had plans to go do my masters, after three months, I offered to resign to go and do my Masters; but they said, ‘No; go ahead and do the masters, we’ll be paying you fulltime. We’ll also pay your school fees.’ So I crashed the masters in twelve months. Then the United Nations gave me scholarship to go for PhD in Mathematics, because my minor while doing my masters was in Math. But I said I didn’t need a PhD. Later, they said they needed a senior reservoir engineer in Nigeria and if I would go. I said ‘why not?’ So, I was transferred to Nigeria as an expatriate. However, once Nigerians found out I was not an American citizen, they started cutting off all the expatriate entitlements, even insisted I went for youth corps; all sorts of frustrating stuff and tribalism. But the people over there had told me, ‘If you don’t like the job, come back;’ it got to point that I said ‘hell no!’ But my mum was like ‘the place you’re going some people made it so, stay here and do your own.’ They gave me a house in Okunola Martins in Ikoyi and a week later, a bunch of armed robbers came in 2 o cock in the night; so I applied to be transferred to Warri and I was transferred to Escravos. I started adjusting, then they transferred me back to Lagos. I was in Lagos for some years, and then I was transferred to Port Harcourt, and then back to the US for three years. All these under Gulf Oil and Chevron. Gulf was the company I joined, then Chevron bought it over during a merger. I used to be the council chairman, Society of Petroleum Engineers in Nigeria in 1999 when Rilwan Lukman was Minister of Petroleum. I was at Chevron for 28 years
You are chief executive officer of GACMOCK; tell us about GACMOCK.
Gackmock Nigeria Limited is a petroleum or oil industry consulting outfit, purely on reservoir engineering, drilling, production, economics and teaching. If you have engineers to train on specific areas, we’ll do it for you. If we go to your office to do a project for you, we’ll take your own engineers to be involved, so that as we do it, they are able to learn it. And we do it in your office with your machine and computer, so that your own people can pick it up and use it to learn and modify and do whatever they want with it. The intention is still geared towards that idea of domesticating the industry. Get Nigerians to do the job.
