HRM, Oba Michael Adedotun Gbadebo
I am pleased to present Oando’s 2013 Sustainability Report. This is our second year of reporting and as we continue to grow as a business, embedding sustainability into our business practices remains a priority, from the conceptualisation of our products and services, to their delivery and to the development of the communities in which we operate. This year, Oando was honoured with the 2013 Africa Oil and Gas Corporate Social Responsibility Initiative Award in recognition of our sustainability endeavours in improving the learning environment of public schools within the Federal Republic of Nigeria.
2013 was a year of re-evaluation for the Group. Changing global and national trends necessitated a major review of the Company’s strategic plans, an analysis of internal and external changes and an evaluation of the performance of each operating entity. Our sustainability strategy is to become the trusted investment vehicle, employer and strategic partner of choice. We have set ourselves the objectives of creating value through inspirational leadership and strategic partnerships to ensure that we realise this strategy. The Board will continue to monitor our performance against targets over the next few years to ensure that we remain adaptable and innovative.
Some highlights of the year
Our business continued to perform well against targets achieving operational efficiency of over 90% at our three operating rigs during the reporting period. We completed several oil mining lease (OML) capital projects including the work-over of the Abo 9 well that started in 2012. Our downstream operations delivered positive financial results with a turnover of over N221 billion. Our aviation turbine kerosene (ATK) sales grew by over 40% largely assisted by our business expansion into Ghana. In our gas distribution business, we successfully commissioned our second independent power plant (IPP) that commenced operations in September 2013 and provides electric power to the Lagos State Government Secretariat and other government facilities in the Alausa area of Lagos.
In relation to our people, we have maintained a good safety record with zero lost time injury recorded at each rig for 2013. We invested immensely in employee training programmes and ran various wellness initiatives, such as, free health check screenings during our EHSSSQ week in July. In addition to welcoming applications for publicized vacancies, we run targeted recruitment programmes like our two year graduate training programme and our active recruitment of Nigerians in the diaspora to bring new skills and innovation into the industry and back to Nigeria. We have succeeded in maintaining a voluntary attrition rate of 8% across the Group and we continue to work towards ensuring that key knowledge is retained within the business through effective succession planning and leadership development programmes.
Areas of development
We recognise that there is still much to be done to achieve our long term goals and reach our full potential. In 2013, there were ongoing security challenges at some of our operations, crude oil theft, sabotage and disruptions to our gas supply to clients as a result of pipeline vandalism. There are also political and regulatory constraints that affect our operations and our ability to conduct our business in the most efficient manner. We have increased security at many of our operations and in some cases developed alternative routes for the evacuation of our crude oil. We have also put in place mitigants to manage our social and political exposure. Our priority is to protect the safety of our assets including our employees and thus secure our financial sustainability.
We continue to develop mutually beneficial relationships that strengthen our market position, give us access to innovation and technology, and promote business growth. We want to share risks and costs, create value, meet the expectations of our stakeholders and stay in business. Our strategic objectives will fortify Oando’s position as a key energy market participant and long term contributor to the development of the industry. We hope to show you in this report that we are making progress against our targets and thank you all for continuing on this journey with us.