[Interview] Joe Gakuo, CEO, Oleum Holdings, Kenya
Mr. Joe Watson Gakuo is the Chief Executive Officer of Oleum Holdings Limited, and the founder of Upstream Awards. He has been actively involved in the upstream oil and gas industry, and in the promotion of local participation.
He talked to Africa Business Communities in this exclusive interview:
Would you please tell us a little bit about yourself?
My journey began on the slopes of Mount Kenya. The past 20 years have been a whirlwind of experiences; from school, to investment banking, to oil and gas. I have learned to adapt fast, be resourceful and build friendships with diverse people from across all walks of life.
Like every human being, I have made my share of mistakes. However, I am proud of what we have achieved so far, and am truly excited about the future. I feel more equipped to take new challenges, and add value to someone’s life. I believe in creating genuine and emotional ties to form communities of diverse yet like-minded ecosystems. This is what we have been building in the upstream oil and gas sector.
You are passionate about local content and increasing local participation. Why is this?
It is simple; these resources belong to the people and they should be of value to the people. In every country with natural resources like oil or gas, the government will often implement local content policies with a noble intent, in an effort to create jobs, spur local industries and tame ‘Dutch Disease’. These kinds of policies aim at promoting a system where international companies work with locals or ‘buying local’ products or services.
Local content policies have their origins in the writings which outlined the ‘Infant Industry Argument’, an argument that was first articulated in the 1790s. Local content is a topical issue, and has become a hot issue in the natural resource industry in general, and oil and gas in particular.
In developing countries like in East Africa, local enterprises are the drivers of economic activity and development. Efforts have been made to promote inclusivity and local participation in this emerging sector, and local content as a whole.
The local content policies aim towards maximization of the national value creation by means of the oil and gas value chain through employment, value addition, technology transfer and the acquisition of knowledge. The pre-requisites for enhancing local content are the rule of law, skilled workforce, and investment-friendly atmosphere. However, we also need to be aware that on their own, these policies are not a silver bullet
Who are your clients?
We serve the upstream oil and gas value chain. The clients include operators, oilfield contractors and service providers in the industry drawn, both local and international. For example, we have worked with logistics, banking, drilling, camp facilities and oilfield services companies among others. We have served Vivo Energy, Schlumberger, Spedag Interfreight, Liberty Insurance, Weatherford, Tullow, Total, Tsavo Oilfields and Rwanda Air among others
What are the ambitions of the company going forward?
In the short-term, we are keen to continue promoting local participation by providing information about the emerging opportunities and engaging business leaders across the East African region. In the long-term, we are building an integrated oil and gas company which will provide solutions across the value chain. We need to have more local businesses involved including and not limited to oil and gas exploration. This is part of the larger local content discussion.
How has the market responded to your products/services? Why do you think that is so?
The response has been great. We have seen a growing interest in the emerging upstream oil and gas industry across the region. The dynamics might be different in Kenya, Uganda and Tanzania. However, the aspirations of our clients and stakeholders remain the same. The biggest challenge which we are seeking to close at this point in time is ‘information gap’ – a lot people in our region are not well conversed with the upstream sub-sector. They do know what is going on or what opportunities are available for them. Our platform like THE UPSTREAM magazine is aimed at providing the information to business community, to allow them to get more informed about the industry and make better decisions on how to get involved.
What is your opinion of the current state of the upstream oil and gas industry in the East African region?
We have come from far. When you consider that oil and gas exploration in the region begun in the 1950s, and now we are talking of Uganda and Kenya joining the league of oil producers, then you realize that we have made great strides. We are not where we truly want to be, and a lot needs to be done, but we can appreciate that we are moving in the right direction.
The industry is capital intensive and the governments will need to come up with policies that attract investment dollars. Remember we are a frontier region and in the global scheme of things, we are competing for investments with oilfields from across the world.
There is also need for more citizen’s involvement to ensure that they participate in this new industry. We need to also put in place measures that will ensure the oil and gas resources are well managed for the benefit of all.
Finally, we expect the final investment decisions (FID), for both Uganda and Kenya to come through within the next 18 months.
What is the latest news from your company?
In 2017, we launched Upstream Awards, a Pan-African platform that takes us on a journey across East Africa. This is already taking place in Kenya, Tanzania and Uganda, with plans to extend the brand to Southern, Northern and West African regions.
Upstream Awards aim at celebrating individuals and companies that are or have contributed positively to the upstream oil and gas industry.
We are also in early discussions with potential investors towards setting up a regional oilfield service company. Watch this space!
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