The oil and gas industry in Nigeria and indeed, everywhere else, is not for the lily-livered, as only the fittest survive, especially in these recent austere times. Despite the inclement operating environment, Famfa Oil Limited has weathered all the storms, and has continued to maintain its lead as one of Nigeria’s foremost indigenous oil prospecting and producing concerns.
As the Chairman of Famfa Oil, could you please, give us the history of the company, and how it has been able to become one of the most successful indigenous oil companies in Nigeria. Many family companies tend to die with their Founders. How is Famfa structured? Do you have a succession plan?
Famfa Oil is a family business founded by Modupe and Folorunso Alakija; it is not the sole property of any individual, as erroneously misrepresented. The shareholding structure currently, at the Corporate Affairs Commission shows that Mrs Folorunso Alakija owns 5,000,000 units of ordinary shares (50%) and Mr Modupe Folarin Alakija owns the remaining 50%.
The company was incorporated in September 1991 as Famfa Limited, and the name was subsequently changed to Famfa Oil Limited in July 1996, to focus on exploration in the oil and gas sector in Nigeria. At that time, the government of the day came up with policies to encourage indigenous investors to participate in oil exploration and production, which was then the exclusive business of the IOCs. We keyed into the initiatives of the Federal government, and went through the formal and rigorous processes, which took several years and saw several changes in administration. With persistence and determination, we eventually scaled through the processes, and we were awarded an oil prospecting licence (OPL 216) on 10th August, 1996. It took us even more grit to get technical partners on board and successfully undertake oil exploration in the field allotted to us, which we named Agbami, because it is located in the deep basin in Nigeria’s high seas. We got the Oil Mining Lease (OML) in December 2004, we hit the first oil on 28th July, 2008 and the rest, as they say, is history.
I agree with you that we are one of the most successful indigenous oil companies in Nigeria, and as I mentioned earlier, we have come this far through hard work and persistence, as well as a deep commitment to building a legacy that will endure. Which takes me to your question on the company’s structure, sustainability, and succession plan. The ownership structure, is as stated above. I have been the Chairman of the Board of Directors from inception, while Mrs Folorunso Alakija is the Vice Chairman. Our four children are all Executive Directors, with both leadership and management responsibilities. They are fully involved in every aspect of Famfa’s business, and our other businesses and charitable endeavours. They have world-class education, vast technical experience, and have successfully imbibed the culture of excellence, integrity and hard work which are the hallmarks of our company. We are already passing the baton to them; they are the future of the company, and they are doing very well already; so, there is no doubt that the company will far outlive Mr & Mrs Alakija.
Famfa seems to have been involved in several court cases from inception, even before it started production. In fact, we understand that without legal intervention, Famfa may not be here today. As a Senior Lawyer, what was the role you played in the legal challenges Famfa faced? Were you involved in any of the cases? Kindly, give us an overview of the cases and the legal hurdles Famfa had to overcome. Is the litigation over?
We had longstanding legal battles with the Federal Government in respect of the asset, even before the conversion of the OPL to OML. However, on the 4th day of May, 2012, the Supreme Court of Nigeria gave a unanimous judgement in favour of Famfa Oil Limited and against the Federal Government and NNPC, upholding the decision of the Court of Appeal, and declared the compulsory and arbitrary acquisition of interest of Famfa as outlined in letters or acquisition dated 27th January, 2005 and 19th April, 2005 illegal, unlawful, wrongful, unconstitutional and thus, null and void for failure to comply with the provisions of the law, paragraph 35 of Cap 10 of the LFN 2004 and the Constitution. The illegally acquired interest in the oil asset was returned to us, and an injunction was granted to restrain the Federal Government and any of its agencies from interfering with our rights in OML 127. The decision of the Apex Court, puts an end to a decade long legal battle fought by Famfa.
I have always been personally responsible for handling our legal matters, including the more popular NNPC & Anor v Famfa Oil Limited. While I had to retain the finest Lawyers in the country to represent Famfa in court, a lot of the research and written arguments upon which the Court of Appeal and the Supreme court predicated their decision on, were prepared by me. The suit is widely reported and has become a notable legal authority for law students, legal researchers, Lawyers and jurists on several principles of law, in particular, with respect to Government’s participation in oil assets.
The legal battle should be over, after all, the Supreme Court is the court of last resort as far as the Nigerian Legal System is concerned, however, we have been having a running battle with the Government and the unit operator, to effect the full enforcement of the judgement nine years after we won at the Supreme Court. We still have some pending contempt proceedings, to this end. I will, however, refrain from making further comment on that as they are sub judice.
We also, recently, got a judgement in our favour, against the Attorney-General of the Federation at the Federal High Court, where we successfully challenged the validity of certain provisions of the Petroleum Act CAP/ P10 of LFN, 2004 and the Oil Block Allocations to Companies (Back-In-Rights) Regulations 2019. The recent cases are handled by our law firm, MFA Solicitors & Co.
The global trend now is moving away from hydrocarbons towards renewable emission free energy sources, and many fear that it would certainly impact negatively on the oil and gas industry. What are your worries, if any, for Famfa in this regard?
Crude oils are sent to refineries, where they become feedstock. The feedstock is used in petrochemical plants and turned into plastic, to make essential products used in our everyday lives. More than 6,000 everyday products get their start from oil, including dishwashing liquid, solar panels, food preservatives, eyeglasses, DVDs, children’s toys, tires and heart valves.
According to the Centre for Climate and Energy Solutions, Renewables made up 26.2 percent of global electricity generation in 2018. That is expected to rise to 45% by 2040. Most of the increase will likely come from solar, wind, and hydropower.
From these statistics, it is true that the world is gravitating towards renewable energy, and this would have an impact on the oil and gas industry. It must be noted that, this is a long-term future goal and does not pose any serious threat to the oil and gas sector right now. The industry will continue to be relevant, for many decades.
For us as a company, we remain focused on our operations and growth plan while we also look into the future and prepare and play a part in the renewable energy revolution.
We understand that you have also diversified into property development in the name of Dayspring Property Ltd, or was Dayspring in existence before Famfa? Again, what is the structure of this company? Presently, Dayspring seems to be erecting an ultramodern building on Kingsway Road (now Alfred Rewane Road), Ikoyi, Lagos. What informed your decision to venture into property development?
We have several business interests, and Dayspring Properties Limited is one of them. It is a family business, and not the exclusive property of any single individual. The shareholding as it stands today are Mrs Folorunso Alakija, 50% and Mr Modupe Folarin Alakija, 50%.
Dayspring is a property development and a real estate company, that highlights quality craftsmanship in the development of beautiful homes. The company has an experienced and dedicated team of experts. Dayspring was responsible for the development of our Rose of Sharon Tower in Victoria Island, and as you rightly mentioned, they are currently working on another iconic project known as the FAMFA Oil Tower located on Alfred Rewane Road, Ikoyi. Our decision to venture into the real estate sector is not far-fetched; the sector is one of the most viable sectors for investment, not only in Nigeria, but also all over the world. We hope to be able to add value to the sector.
Sir, you are a Lawyer of close to 50 years standing at the Bar. What is the difference law practice in the 1970’s and in the present day? There are so many complaints about practice today, ranging from unnecessarily long delays in the court proceedings, some Judges not understanding the issues in litigation that they are deciding upon in their courts, to forum shopping and multiplicity of actions, conflicting court orders, to mention but a few, so much so that the CJN had to recently summon some Chief Judges in this regard. What are your views about these complaints? As you are aware, some Judges were even arraigned for offences ranging from money laundering to fraud, forgery, corruption and judicial misconduct. Did this kind of thing occur back in the day? What is your opinion on the issue of judicial corruption in Nigeria today? Do you think it is related to the poor remuneration and conditions of service of judicial officers, or it is no excuse?
The judiciary is very much a part of the system, which generally is in a state of decay. Educational standards have fallen generally in the country, and this is reflected in the quality of advocacy, as well as the quality of the judgements delivered. Corruption is the cankerworm destroying the fabric of the society, and it is being inflamed by the economic circumstances. Legislators, civil servants, Lawyers, and Judges shop in the same market and pay the same prices; this makes Lawyers cut corners in order to meet their economic demands, and they will embark on any form of sharp practices to be able to achieve this. Judges too feel disgruntled due to poor conditions of service, and this makes them easy prey in the hands of both Lawyers and litigants alike. I must admit sincerely that this has been an age long malaise in the profession, but as the country descends lower, people descend further into poverty, and corruption has become more prominent than it used to be. That is the situation we find ourselves in today.
What are your views on the agitation by some for Odua Nation? Do you subscribe to ethnic nationalities agitating for nationhood? Do you agree that Nigeria should be restructured to reflect true Federalism, or that the Unitary system which we practice presently is satisfactory?
The agitators for the Yoruba nation, have their reasons for agitating. These reasons, I believe, are centred around national development, improved quality of life amongst others. Now the clamour for these things are not bad, because they are the basic amenities that make life worth living.
However, I must point out that there are pros and cons to becoming an independent nation. Personally, I do not subscribe to ethnic nationalities agitating for nationhood; we are better off as one united nation, than being separate entities. Yes, we have our issues and as a country, we should look inward and find lasting solutions to those issues with fairness and justice for all. Nigeria is a great nation, and the country will surely overcome the current challenges.
Thank you Sir.