David Whitehouse
Oil pilfering will continue until the government changes the script, says veteran oil industry executive Babs Omotuwa.
Babs Omotowa’s first assignment in the oil industry was to try to stamp out theft at a Royal Dutch Shell warehouse in Nigeria in the 1990s. Today, the country won’t fix its oil theft problem until the government appoints a dedicated “tsar” to tackle the issue, he tells The Africa Report.
Large-scale armed oil theft in Nigeria dates back to 2008, and was possible due to complicity from some individual members of the country’s armed forces, as well as oil industry insiders, says Omotowa. Theft on such a scale is only possible with industry knowledge, and such volumes of stolen oil can only be transported by tankers, with such movements being impossible to conceal, he says.
Nigeria’s oil production is currently running at about 1.1 million barrels per day (bpd), while capacity stands at around 2.5 million bpd, the level of production which the country achieved in 2010.
Years of underinvestment in production is part of the reason for the decline, Omotowa says. Still, “there’s no doubt that significant volumes of stolen oil are still being sold. The complicity is still there today”.
The Nigerian National Petroleum Company (NNPC) said in 2022 that theft was costing it $700m per month.
Omotowa says there’s no sign of either the political will or the institutional capacity to get to grips with oil theft. The government has “used all its instruments in the past and it hasn’t worked. There’s a “lot of rhetoric and a lot of cosmetic effort”, which is largely ineffective. “People who are making huge amounts of money are not going to give it up,” he says.
Nothing will change until the government appoints a “tsar” to address the problem. Current efforts, he notes, are dissipated across multiple agencies and a single point of responsibility is lacking. Such a tsar, he says, would need to be backed by modern technology such as drones to monitor tanker movements, and be empowered to deploy rapid response forces. “This requires a different approach.”
From farm worker to director and chairman
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Omotowa grew up in Okoro-Gbede in Nigeria’s Kogi state. His father was a farmer who had worked to put himself through university in Sierra Leone. Omotowa had to work on the farm during his holidays as a university student, which he says was a formative experience in terms of his work ethic.
He recounts his life story in his book From Storeroom to Boardroom published in 2021. “My career was one of outright rejection of the status quo, which was the perception that Africans, Nigerians, underperform in global business,” he writes.
Omotowa joined Shell as a graduate trainee in 1993, and started work in a warehouse at Warri. Theft was rife at the warehouse, and Omotowa was responsible for storage. “It was the worst place you would work in the company”, more like a junkyard than a warehouse, he recalls. He introduced new technology and an inventory management system which reduced the stealing. “It was one of my toughest jobs.”
His success at the warehouse meant he was sent to work for Shell in Aberdeen, Scotland, where he became a marine manager. Omotowa was meant to be in Scotland for four years, but stayed for eight. He rose to become Shell’s vice president for sub-Saharan Africa, and between 2011 and 2016 was managing director at Nigeria LNG.
Today, Omotowa is chairman of the advisory board at Montserrado Group, a Dutch project development and advisory firm focused on energy infrastructure in West Africa. He also has non-executive directorships at Seplat Energy and Stanbic IBTC.
Founder of Africa’s MIT university
Omotowa is the founding president of the Nigerian University of Technology and Management (NUTM) in Lagos, established in 2019. The non-profit university, backed by the Mastercard Foundation, targets aspiring entrepreneurs and aims to reduce the amount of training that future employees will need once they join a company.
Such a university is needed, Omotowa says, because many Nigerian universities have remained static, with teaching methods rooted in the 1970s. The result is that many graduates lack the capacity for critical thinking and aren’t up to date in terms of technology.
Corporate employees in Nigeria, he says, often need between one and two years of training, which can be reduced with a greater focus on technology and skills. The university says that alumni employment is 100% within three months of completing a programme. The aim, Omotowa says, is for NUTM to develop into an African version of the Massachusetts Institute of Technology (MIT).