Abdullahi Bashir Haske is the founder and Chief Executive Officer of AA&R Investments, an indigenous oil exploration company. In this interview, he highlighted how the oil and Gas has faires and how it would survive and importance of creating an enabling environment for the non-oil sector to thrive. Excerpts:
• How would you access the oil and gas industry in the heat of global crude oil prices crises?
Normally when there is price crash of crude, investments in the oil and gas sector will be affected especially the capital projects. That said, from what we are seeing lately, the prices are beginning to go up again with the opening of major economies such as the U.S.A and China which were closed because of the global pandemic. This is going drive demand and continue pushing prices up.
However, for a country like Nigeria which is largely dependant on revenues from the sale of crude any negative shock to prices will affect the entire economy. Now due to the current situation we are sweating over how to fund the country’s budget.
This is the more reason why this country must urgently develop the non-oil sector and reduces the cost of running the government. They must also provide enabling environment for private businesses to come and invest in the economy to create jobs and generate revenue.
• The oil prices recorded a surge yesterday, what are the factor responsible for that and how sustainable are they?
Oil prices began facing some shocks sometime in late February and early march when Saudi and Russia fell out and were unable to reach an agreement to cut their output. Over the past three years the two countries had agreed to be part of an agreement to sustain an increased production. However, when the Saudi Government requested for production to be cut by over a million barrels, the Russians refused. Saudi was requesting for the cut to keep oil prices high because demand was slowing down from china (the world’s largest importer of oil) who were already in the middle of the covid-19 crisis.
So, we found ourselves in a situation where the market was flooded with excess oil thereby causing prices to crash. So, while demand was falling rapidly, supply was increasing. Then in the months that followed, the pandemic took a toll on the global economy and virtually every country was closed this further compounded the problem.
• AA&R Investments found oil in Bauchi. How did you feel about the feat and kindly share your experience with us?
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For the records, AA&R investment is the group company where we have all our subsidiaries including Etihad Oilfield Services Limited which was the contractor for the drilling campaign in Bauchi.
I must say it was a long journey getting to where we are now, very tough, and challenging. Firstly, when we first conceived this idea and wanted to be part of the story, most people never believed our vision for this project some told me that it was never possible, and it will never work.
Secondly due to the security challenges in the region, it was difficult to convince service providers and investors to take part in the project similarly, there was the fear that we will not find anything even after drilling.
But we never gave up we kept pushing and trying to set up a project team and we eventually got there we mobilized to site and commenced operations. It was the first-time a project of this magnitude has ever been carried out in the northern part of this country as result we faced many challenges.
We thank God after several months of operations we hit, and it was a success. I felt fulfilled and excited about it for the fact that I come from the north east region and I have seen how for many years the region has become backward as result the terrorist attacks. Secondly that we achieved this feat as an indigenous company the first of its kind.
It is my hope that the opportunities that will come with this project and future projects because of the success of our operations will be put to the good use of the country and her people.
• What is your level of investment in the agriculture sector and what was the attraction?
Agriculture is one area I have much interest in now we have two projects we are working on. The first is setting up of a modern 12 ton/hour rice mill in Adamawa state which we intend to expand to 24 ton/hour as time goes on and we expect to complete the rice mill by end of third quarter 2020.
We also intend to set up rice irrigation farm project on 5000 Hctr land close to mill to ensure we have adequate supply of raw materials and optimize production. The second project is cassava starch processing plant in Kwara sate which we also hope to commence development within the year.
As for what attracts me to agriculture, I would say that it is one huge sector with very little investments in it. It also has the potential to employ millions of people in this country and provide food sufficiency to the country.
• Do you think the sector is really lucrative considering several challenges facing it now?
The sector is promising and has huge potentials to make it lucrative. As you rightly noted, the sector has several serious challenges this has made it impossible to succeed in the sector and until these challenges are addressed professionally, the sector will continue to suffer
You know the agriculture sector has a long value chain, expensive to run at commercial and industrial levels and highly risky. From the upstream where raw materials are produced to mid-stream where you look at aspects such as storage to the downstream where these raw materials are processed into finished products.
• You are a self-made serial entrepreneur. Do think Nigeria space is really encouraging entrepreneurs/SMEs, regarding access to fund?
No, I do not think so, on the contrary the business environment is very tough despite the huge business opportunities out there. We hear of so many initiatives to provide access to credit for businesses but accessing them is difficult, you have to go through series of bureaucratic and outdated ways of getting your documentations which takes so much time and by the time you get them your ideas have become obsolete, either your financial analysis and projections have been affected by one government policy or inflation or even currency fluctuations.
So really, a lot of work has to be done for entrepreneurs to get access to credit, I can understand that we do not have a robust credit rating system due to a poor database. Therefore credit facilitators are left with no option but to put high risk management requirements to mitigate the chances of default by borrowers which is already a problem.
• Tell us about Etihad Group, subsidiaries, feat achieved over the years?
As I said earlier, AA&R investment is the group and we have about eleven subsidiaries under it of which Etihad Oilfield Services is one of them. Our business interest as you are aware is Oil and gas, marine services, agriculture, information technology and logistics services. The Oil and gas sector of our business have seen some tremendous success of which the Drilling project in the north east is one of them.
In the information technology space, we have recently been successful in getting a Value-Added Service (VAS) licence as an aggregator by the Nigerian Communications Commission (NCC). In the agriculture sector, we expect to commence operations of our rice mill in the Adamawa state by end of 3rd quarter or beginning of 4th quarter this year.
When completed, it will the first of its kind the entire north-east region of Nigeria. We also have in the pipeline a cassava starch processing plant in Kwara state. So, in general we have achieved a lot and still working to do more.
• What are the main challenges you faced that almost made you turn back?
As I always say all the time, the major challenge I faced was getting your partners and people you work with to believe in your dreams and vision. This has been tough especially at the beginning when you first start. The moment we achieved that and had a team that was driven by a shared vision we were set and never looked back.
• If there are, what are your driving forces amid the challenges?
The driving force is to remain positive during the difficult times and never give up.
• How do you adjust to the new industry realities?
To see every challenge or problem as an opportunity to develop new ideas and solutions to current problems through research and innovation to meet with the new realities.
• What are your projections for Post-COVID-19?
The pandemic has changed the way we do things possibly for the rest our lives, and its normal when things like these happen that businesses try to adjust to these new realities. My projections post the pandemic is that we need to design and improve current business continuity strategies on how to minimize the impact of such problems on businesses.
• Who are your mentors and do you mentor some?
My father remains my biggest mentor, we lost him when I was very young but my memories of him and the legacies he left in the minds of people as I grew up and got to realize have been a driving force in my life and my aspirations.