Home | Comment & Analysis    Tuesday 30 July 2019

Transforming South Sudan’s oil industry into a world-class standard

“It is in our best interest to. . . embark on a revolutionary change that will lead us away from oil dependency rather than drag our feet and suffer the costs of becoming growingly dependent on a diminishing resource.’ Truer words were never written.” Albert Marrin

By Gabriel M. Maliah.

The quest for competitive advantages by world-leading industries and states have prompted them to invest heavily in human resources capacity building to build the right skills which may contribute to economic prosperity through the improvement of productivity and growth.

South Sudan is the world’s newest nation blessed with abundant natural resources, which if managed wisely by the relevant institutions can lead to sustainable development and long-term success. However, the institutional challenges of the National Petroleum and Gas Commission, Ministry of Petroleum and the Nile Petroleum Corporation (Nile Pet) as the government entities pose a major threat in transforming the sector. Challenges like poor institutional design, the ineffectiveness of the policy-making body, low institutional capacities and lack of technical capacities are the barriers to the growth of its oil and gas industry to the world-class level.

Reflecting back to the top management of Nile Petroleum Corporation’s personnel secondment plan and strategy to three sisterly joint operating companies namely, Dar Petroleum Operating Company (DPOC), Greater Pioneer Operating Company (GPOC) and Sudd Petroleum Operating Company (SPOC), one can conclude that there were no set criteria in place and rotational policy for such nomination. The appointment or recommendation of some Nile Pet secondees was not based on merits, but rather on political affiliation and tribal line and this has resulted into incompetence and poor performance which later brought lack of respect and recognition toward them by their partners in the business.

Exuberated by the failure of the Petroleum and Gas Commission, Ministry of Petroleum and the Nile Pet to devise a proper system that identifies annual trainings needs for staff and promote most talented employees, the biased appointment of Nile Pet secondees to SPOC, GPOC and DPOC has also led to lack of middle managers and senior management with relevant knowledge and technical know-how of the oil industry.

Also because of the institutional challenges mentioned above, South Sudanese who were hired on merits to work at the different oil companies in the country, have not been going for proper training to develop their skills. This severely inhibits knowledge transfer consequently affecting the development of a local capacity to maximize participation in exploration and production. For instance, some of the technical staff joined GPOC since 2012 and only went once for an on-job training abroad and some have not made it. Such one-time training is extremely inadequate and would not be the case if there are scheduled plans for staff training and constant upgrading of workers’ skills agreed by the Ministry of Petroleum and investors. These types of training should include core and functional competencies required with their respective levels to help determine an overall competency of an employee.

On 6th July 2019, a very important administrative meeting was conducted by the Nile Petroleum Corporation Managing Director, Dr Chol Deng with all the secondees of Nile Pet from the three joint operating companies. An invitation was also extended to the Ministry of Petroleum and the Minister himself including the Undersecretary came to the meeting. The meeting was conducted very well with impressive speeches from the Minister, undersecretary and the MD. Their speeches were very great and were all on a total transformation of the oil and gas industry of South Sudan to world standard. However, if Well-designed governance structures that are fundamental factors in the effective and efficient management of the sector are not formed and empowered, then such revolutionary change will be a plan on golden paper that will not be implemented. The proposed plans by the minister can help us utilize petroleum revenues to develop manufacturing, agricultural and other service sectors avoiding over-dependence on oil.

If we take a look at the top five (05) Oil and Gas companies in the world from 2019 report and how they reach to that level in terms of their strategies and tactics, it is all summed up to PROPER CAPACITY BUILDING AND GOOD GOVERNANCE POLICIES by their empowered industry leadership. For public consumption, the top five oil and gas state-owned companies in the world in term of annual revenues are 1. Sinopec of China, 2. Saudi Aramco of Saudi Arabia, 3. CNPC of China, 4. Royal Dutch Shell of UK-Netherland, 5. BP (British Petroleum) of UK.

Given the long-term experience of the new Minister of Petroleum in the oil and gas industry as the implementing body, there will be no doubt of the said reforms in the oil sector to the world-class standard and this will be possible if he is empowered by the president of the Republic of South Sudan and other related government institutions. Most of the major reforms in most state-owned oil and gas companies in the world were initiated by the head of governments of those companies. For instance, recent major reforms of Russia’s state-owned company called Gazprom was initiated by President Putin and made a shift in management personnel and policy which has led Gazprom to be the 9th oil and gas company in the world in term of annual revenue.

As stipulated in the Petroleum Act, 2012 that the ministry of Petroleum shall formulate strategies, plans and programmes for the development and management of the petroleum sector, I suggest that the Minister of Petroleum in collaboration with the Managing Director of Nile Petroleum to consider the following in addition to their reform agendas for total transformation into world-class standards:

• Any appointment to service should be based on merit and professionalism;
• To make capacity building be the key policy for the development of all industry employees;
• Be committed to developing world-class talent and ensuring its workforce is fully prepared to seize the vast opportunities South Sudan’s natural resources base offer;
• To build a robust pipeline of expert engineers that can make the most of emerging technologies to ensure that we remain resilient and thrive in the future;
• To start yearly professional development and should be part of continued efforts to build a world-class workforce with enhanced advanced technology and innovative capabilities both in upstream and downstream engineering disciplines;
• To sign long- term partnership with other world’s leading universities in the US, UK, Malaysia, China, India and France as well as service providers to train and develop employees to the highest global;
• To screen all the employees for training through rigorous examinations for selection and to follow strict performance evaluation criteria without compromise;
• To make sure that Nile Pet is globally competitive by expanding its overseas operations in exploration and production in the next ten years;
• To adopt an aggressive strategy which should aim at achieving at least 80% of local participation in all its operations by 2029 – 2030 which should act as a national symbol for an everlasting success;
• To campaign for the increase of South Sudan’s expenditures on education and training which should support key policy for the development of its human resources that are sources of competitiveness in the international market.
• To make the terms and conditions of international oil company’s licenses mandatory for transfer of skills and competence to national employees;
• To strictly monitor and oversee operations of the oil companies so that they adhere to the provisions of Petroleum Act and the relevant regulations consequently enabling proper management of petroleum revenue and environment.

In conclusion, it is therefore worth emphasizing that Well-designed governance structure characterized by a strong emphasis on transparency and accountability in the oil sector is a key determinant factor of success in the management of the sector. Such a well-designed governance structure would be able to formulate the two questions below:
1. What knowledge and technical skills do our national workforce currently have?
2. What knowledge and technical skills do our workforce currently need to reach world-class competencies levels?

The author is a Petrophysicist working in GPOC and a master’s student at the University of Pretoria in South Africa and can be reached via email: matutmaliah@ymail.com