I'm going to be painting a picture here about certain realities in Nigeria's oil industry mostly oblivious to the general population of job-seeking graduates. I was never aware of these realities before accepting a job in this field. Had I better information, I would have made more informed decisions about where I have chosen to spend the rest of my working career. Now, I'm not complaining; I enjoy my job. Neither do I want to come across as painting a gory picture which should dissuade prospective applicants from trying their chances in this industry. However, I think there's a dearth of information out there. An incredible shortage, if so. Therefore, it only makes sense for this exposition to be out there for those who may eventually need it.

Okay, so here we go!

cc: lalasticlala

The oil & gas industry in Nigeria is a rather big one. Crude is Nigeria's major export, so it makes perfect sense that a large chunk of human and capital investment is deposited into this field. As should be suspected by any perceptive Nigerian however, the country's lack of discipline in many other fields of human and national development veritably extends to the oil & gas industry. With a GDP per capita of 3,150USD against a value of petroleum exports put at close to 77,000 million USD, Nigeria doesn't compare favourably well with other OPEC states and certainly not so well with fellow African member Angola which has a GDP per capita of 5,270USD against a value of petroleum exports no more than 58,000 million USD. In fact, Nigeria's overwhelming population bogs down a nation already crippled by patronage, rent-seeking and blatant corruption from the lowest to the highest levels of government. That this stultified giant must yet provide jobs for a large subset of this population which is educated, wants job and is capable of working portends a reality that is troubling. Latest statistics reveal about 11.1million youths in the country are unemployed; cursory analysis should probably suggest more. With a greater number underemployed, the picture does seem gloomy.

In the midst of this chaos is a sector driven by international prices and demands. The oil & gas sector, Nigeria's biggest economic driver, makes case for good interaction among foreign multinationals, local companies, marginal operators and an expedient government. Perhaps, since the government sees pertinent need to sustain its exports on the one hand, and its status among fellow OPEC states on the other, it has cogent reasons to sustain activities in the country's oil sector in spite the many infrastructural deficiencies demanding attention in other real sectors of the economy. Driven by multinationals and favourable net bargaining, the oil & gas sector has become so attractive that it's arguably the biggest payer in the country. Graduates, experienced professionals, contractors and policy makers fall over themselves to grab a piece of the available pie. Not that it comes easy. But it sure comes with immense satisfaction once obtained. Exxon, Chevron, Schlumberger, PDL, international & local companies alike dictate the terms, however unfavourable. Blinded by months of frustration and the desire to improve their spending pockets, hungry job-seeking Nigerians look past these terms and have no construct what they are giving up to end up in the employ of these companies.

They have no idea how debilitating these terms may be.

Even though what I'm going to delineate is quite much what is obtainable in any oil sector the world over, I'm just going to stick to Nigeria. These situations seem to play out more forcefully in the country, partly because of the country's labour laws and the sagging weakness of its labour courts and partly because of a certain Nigerian factor that explains a wide variety of happenstance from why the tap is not flowing to why the roads have gaping potholes in them.

Nigeria's oil industry is comprised basically of three sectors: upstream, midstream & downstream. I have used "basically" because these aren't exactly the three discrete arms of a ceiling fan. Rather, there is wide continuum of activities ranging from core upstream to core downstream. Some individuals find themselves somewhere in the middle doing activities no less midstream than it is upstream, while at the same time downstream could be used to describe some other activities merely for the sake of convenience.

The vagaries of the country's oil market render the two latter streams somewhat susceptible to superficial forces. Employees in the mid- and downstream must contend with local market forces which influence demand and supply considerably enough to affect their pay. Even though they fare quite well, there still remains some gap between their earnings and the earnings of those in the upstream sector whose pay is determined more by international market prices than by local storms. This has made multinationals operating in this stream of business some of the biggest payers in the country. It poses no problems for their pocket, it must be said. Earning probably more than the two other streams combined and employing less personnel, upstream players can readily afford the handsome pay package of its few staff.

Whatever the nature of these streams though, the industry seems definitely divided into layers in an ecological chain where one group depends exclusively on the other.

Nigeria's oil industry has an active coterie of government, multinational and local companies. Sitting atop the food chain is the country's national oil company, NNPC and other government players. They dictate the pace of development, enforce regulatory laws, police foreign companies and determine what and where to drill. Though years of patrimonial rent seeking, immense neglect and negligence, institutional corruption and an entrenched bribery culture has dealt debilitating effects on these government institutions, their place as chief producers remains as assured as ever. Shortly, we'll come to what benefits (and lack thereof) this gifted their employees.
Right below the chief producers are the major oil companies in the country, who after long years of government association have stamped their foot on the Nigerian land mass. These are often multinationals with wide reaches all over the globe. Exxon, Shell, Total, Agip and others make up the pack. Next are IOCs, not so much on the same strata as these major players as they are with the group of local producers, a slew jostling for space on the same scene. Boasting of professionals most of who had cut their teeth with many of these major oil companies, these independents (local and foreign) are gradually extending their reach in the Nigerian oil space. Major and minor alike, they share the goal of reaching into the deep and extracting what oil abounds there by the thousands of barrel. After all, Nigeria's proven crude reserve estimate of 37,070 million barrels seems huge enough to go round a thousand times over. For now, we'll ignore the seeming reality that at today's price the value of this storehouse is less than half the fiscal budget of the United States for 2015. The oil producers are "customers" of the government, who in turn is their "client" before whom they must be of their best behaviour. Lip service, genuflecting displays and opportunistic gifts characterize this relationship. However their self-seeking does not begin to compare in the least to that which accompanies the relationship between the oil producers and their own "customers" or contractors to whom they entrust basic duties.

The contractors follow the producers in the ecological pyramid. Transocean, Seadrill, Schlumberger, Halliburton, Weatherford, Scientific Drilling and a host of others make up the contractor party in the upstream sector. The mid- and downstream also has its own share of contractors, disposable hands who handle a chunk of the bigger players' main activities. Some are multinationals themselves who boast of as much global influence as the big oil majors; others are indigenous companies eking out a share of the market in less technologically competitive activities. The indigenous companies partner with other multinationals in certain instances where they are short of required technology to serve the ultimate "client". Because contractors depend exclusively on the producers amid the intense competition and jostling among themselves, their relationship with the client is often of crucial significance.

Further down afield are a retinue of so-called manpower companies. These are contractors of contractors, the veritable scum of the industry; perhaps even twice as distant from the contractors as the contractors are from the producers. Their survival does not just depend on the contractors, it goes on to hang ever so precariously on the contractors' clients. This cavalcade, open to every other work opportunity however meagre, wade in the industrial morass through every job, every cycle and every shift earning as little pay as they grapple. They are often always local companies, ventures of an opportunistic Nigerian or foreigner who wants to make a fortune overnight and ready to accept rather unfavourable terms. The employees are the contract staff, the short-term staff, or anyone fitting such description.

davide470:
....You can continue now

To be continued shortly

The client-customer relationship is a hugely significant aspect of industrial relations in the oil industry and, as should be expected, is greatly influenced by the cultural flags and associations of the respective country. Though slightly more complicated, we can summarily reduce this relationship to that which exists between a buyer who is capable of purchasing, and a seller who has the goods desired. Hence, it's really no different from that relationship which exists between you and the Abokki-trader manning a kiosk in front of your gate. Except it's slightly more complicated.

The oil major owns the business. In the upstream sector, the major acquires drilling rights from the chief producer, in this case the government. Between the major and the government exists a client-customer relationship tempered with respect, formalities and shifting niceties. The major is the professional customer seeking privileges from a client-government that is unpredictable, negligent, and heavily capricious. Though the majors may claim to hold their own, they are inevitably subject to the whims of an impulsive government that holds its resources so closely to its chest. To this end, the customers must shift grounds severally, pay respect and fight astutely for favourable offers. Any actions deemed untoward by an unscrupulous government could have dire consequences on the future operations of these majors. Nothing is permitted if untoward, however irrelevant to the discussion. Not sneezing. Not coughing. Nothing. Even if that is termed untoward.

This is why Nigeria can easily renegotiate standing JV contracts with no iota of forewarning. The majors, customers that they are, will fall in line and adjust their business outlook with respect to that change. Constantly dodging a maze of legislations, these multinationals must continually mould their business according to the guidelines set by their client so they do not risk ejection. And regarding JV contracts, they must continue to grease the palms of a retinue of ministers, aides and special advisers in order to stay ahead of competition and in business.

The graduate who wants to work for these oil majors must know that he will join in this self-serving genuflections, must be adept at it, should he desire to climb the corporate ladder. Having the job is not sufficient; that graduate must be willing to take the "sh..it" his client will give, learn to internalize it and use it to better his job. Early contracts duly appended assured signatures will suddenly grow tenuous and he'd have to explain to his bosses why what he has no control over has vanished. Naturally, he isn't told all of this as he begins his job. But what's in store for him may turn out unwieldy.

lookingbuoy:

kittykat1:


From what you wrote, you work for Schlumberger.

kittykat1:


From what you wrote, you work for Schlumberger.

fopishow:
I wouldn't agree any lesser, Schlumberger or Halliburton

wman:
I enjoyed this thread a lot. Really educative and we'll constructed. The first spammer even spammed with a conference related to the oil & gas industry and not some nonsense.

Kudos Op.

SlimBrawnie:
Sorry to ask, What is your field of study and what chance does a graduate of Computer Engineering have to work in the oil industry?

lookingbuoy:

A computer engineering graduate stands a good chance of working in the oil industry. I have colleagues who studied computer engineering.

Jamean:
Jamean was here, in view of Eureka

lookingbuoy:

A computer engineering graduate stands a good chance of working in the oil industry. I have colleagues who studied computer engineering.

thankyouJesus:
Good morning sir, sorry to bother you, what about Mathematics? If yes, what job description/department best suit a Mathematics graduate? Thank you as I await your response?

Emyben:


Goodday sir. What chance does an Msc Architectural graduate have in the oil sector? I know Diezani was an Architect and worked in NNPC before becoming minister but am curious. Which job description suits the architect in the oil industry if your answer is yes?

Jamean:
hmmm

lemme too ask.. what about an Accounting/HR professional ?

lookingbuoy:

I'm sure the company would like to be more concerned about your first degree and in what area it is. With a masters in architecture, I don't really don't know how your dice may fall. Again, you should take this as the final word. But from my own experience, I haven't seen any colleague here or with competition who has a masters in architecture. In fact, a Bachelors is always almost sufficient to work with in the upstream industry. Having said that, I'm sure there's nothing connection can't do for a graduate in any field.

Emyben:


Thanks a lot for ya reply sir. But like i asked, am curious as to what job description suits the architectural graduate in the O&G industry.