Cameroonian-born NJ Ayuk is the managing partner of Centurion Law Group, a pan-African corporate law conglomerate that specializes in energy, extractive industries and the financial sector. Headquartered in Malabo, Equatorial Guinea, Centurion has offices in 5 countries across the continent.
Ayuk has been active in the structuring, negotiation and implementation of natural resource projects in sub-Saharan Africa, with extensive experience in advising both international and local companies and governments. He recently advised Oranto Petroleum, one of Africa’s largest oil exploration companies, in the landmark acquisition of four strategic oil blocks in Niger Republic.
He recently recounted his journey and spoke to me about his outlook for the African oil and gas sector in 2019 among other topical issues.
Walk me through your educational and professional background.
I earned a degree in Government and Politics from the University of Maryland College Park, a Juris Doctor in Law at the William Mitchell College of law and later an MBA New York Institute of Technology. Starting out, I was fortunate to work for BakerBotts LLP, the United Nations Development Programme, Vanco Energy and later I founded Centurion Law Group. Before ever getting a white collar job, I understood work and client service through cleaning hotels, construction jobs, fast food but I also worked on pro-democracy and human rights campaigns which are huge passions of mine.
You’ve become one of Africa’s most prolific energy deal makers at a relatively young age. What ignited your interest in law in the first place and what drew you to a career in energy law?
As a student at the University of Maryland, I was mentored by Dr Ron Walters who was Jesse Jackson’s deputy campaign manager and he shaped my believe in justice. He laid a strong emphasis on believing in the teachings of Charles Hamilton Houston that a lawyer is either a social engineer or a parasite on society. Each one of us has a mandate to use our education to impact communities and to also promote economic growth and empowerment.
I paid a lot of attention towards to the energy sector because I felt most of Africa’s problems came from a contact fight with the waste of our natural resources, lack of power for many local communities and lack of training and education in communities that were resource rich. Even more apparent was the fact that Africans were not part of any kind of deal making structure. Simply, Africans were not at the table or even in the room. Then you ask yourself why the Western boys should have it all? Why can’t Africans be part of this economic empowerment?
I knew nothing about the oil and gas sector but I knew had skills and I had a great legal and business education and I could fit the pieces together. Plus, I just had to work harder than anyone else! I knew that in a sector where you didn’t find a lot of Africans, I was both a risk and an opportunity but I had no doubt I will beat them all. I like to compete and win. I just knew if I got into that ring then I was going to come out on top.
Many African business firms and governments were always getting screwed by big oil companies. Big companies come in with a certain arrogance; looking down on little folk which only fuelled me to beat those opposing counsels lawyers who were trying to rob Africans of their resources.
You’ve built Centurion Law Group into one of the most successful Pan-African commercial law practices with offices all across the continent. Tell us about the Centurion Law Group and the series of events that led you to establishing the group?
I grew up in an environment where I was thought to feel proud of who I am and my community. Despite of the injustices that existed around me, I was lucky to have parents that reminded me of my role in society. You grew up knowing what was expected of you and being reminded not to stand by idly. I was taught to question everything. My experiences are an evolving expression of my deepest held beliefs and my desire to see a better Africa.
Earning a Juris Doctor in the US and the law school experience also shaped me to think a lot about economic justice. This then evolved to ensure that justice and corporate profits can work hand in hand especially in the energy sector and Africa. I felt that I could do more than just draft contracts. My MBA put my energy into building something. Simply, me becoming an entrepreneur is an extension of my childhood teachings and my educational experiences.
When I had a chance to work on oil and gas matters, it was sad that there were not many Africans negotiating big-ticket deals or big contracts. African owned energy companies, state companies and governments and even the foreign companies used and worked with only European and American firms. A lot of people were getting screwed and walked over. I was stunned but I also saw a huge business opportunity. I knew I had to learn the ropes of oil and gas plus I was really determined to make a difference. I knew the secret was good old-fashioned hard work. And, I understood no one would give me a break so I would have to work double and be ready to take some hard punches from detractors who felt I should be working for them and not leading discussions.
The African legal space had no set up to support African oil men and midsize western firms wanting to do business on the continent. It certainly had no set-up to support lawyers or any kind of advisors. I understood that adding value to international and regional businesses and giving them more value would help my firm grow. Starting out with this concept, I wanted a loyal base. But more importantly, I wanted score some big victories because the rest would be history and this is exactly what has happened.
We started with one office, then expanded into many African offices and affiliates across the continent. At the same time we also pushed for partnerships in the US, Canada and Europe and it paid dividends. I understood that I had to share and in some instances I would have to earn less but I knew once I had my team properly trained, I would get my fair share in the deals.
I loved the idea of Centurion Law Group because I wanted to drive a clear purpose with my work. I didn’t want to make choices in a vacuum. Starting Centurion was an opportunity to use the law to make someone’s life better. It was also about self-reliance; it affords me a chance to accommodate my contrarian nature by confronting those who think they understand my duty better than I do.
What sort of year has 2018 been for M&A in the African oil and gas sector and what’s the outlook for 2019? Has the partial recovery of the oil price improved the deal environment or is volatility a cause of concern for investors?
Stability in the oil market is good for Africa. Uncertainty and volatility is a lethal disease in this industry and it is really bad for investment. OPEC’s historic “Declaration of Cooperation” led by an African son Mohammad Sanusi Barkindo literally saved the oil industry and many African projects and countries from going into extinction. Lest we forget that most oil states are over reliant on oil and their economies take a dive when the price of oil falls.
You continue to see a resurgence in the industry with a lot of deals happening. There are more bidding rounds for new licenses. Most importantly there are a lot of projects being sanctioned that had earlier been put on ice. Rig counts have gone up and also service companies are acquiring small African firms. Overall this is good especially as more jobs are being created for the everyday African.
I see a lot of quality deals closing during this quarter as the sub-$50 oil price risk is largely over. Africa is benefiting from an increase in the oil price, decreasing valuation gaps and improving market sentiment. I expect this to continue into 2019 with an even increased access to capital markets and value chain integration and there are very good prospects for blockbuster deals in 2019. These are exciting times and buyers have plenty of choices to rapidly deploy capital around Africa oil projects.
What are some of the most daunting challenges facing oil and gas exploration activity in Africa today, and what are you doing in your capacity as one of Africa’s top energy lawyers to confront those challenges for your clients?
Exploration is a difficult, capital intensive and risky business. Africa has made progress but the constant lack of an enabling environment in many countries is a problem. Corruption, huge lack of infrastructure and human resources have slowed growth during a time when the industry should be picking up at a rapid pace. Explorations programs are being slowed by regulatory uncertainty and we have to admit the numerous delays in passing market driven laws is problem. It is not a doubt that the much-delayed Petroleum Industry Bill in Nigeria has slowed exploration activity in onshore and offshore areas and most importantly gas monetization.
I lead the African Energy Chamber which is the largest industry association in Africa. I make it a point to push governments on these issues all the time. Government has to listen to private sector and civil society. There is also a responsibility that lies with the oil companies and especially African companies in the industry and state oil companies. We must build better organizations and run better businesses. Private sector has to partner with government and to create jobs and grow domestic opportunities. African businesses have to understand that it is about delivery and getting the job done. Always look at your ROI. All the glamour does not count. Keep your eyes on your money. You have an obligation to make profit but also close the gap between struggle and success.
You’ve done a lot of big deals recently, including advising Nigerian junior Oranto Petroleum in the acquisition of 4 oil acreages in Niger republic. Can you discuss some of your milestone moments?
I think I am proud being able to advise companies and governments on some of the best oil acquisition deals. Negotiating different type of oil and gas and mining contracts in more than 17 African countries is something I look back can only be thankful for. Lobbying OPEC member states to gain entrance for Equatorial Guinea and Congo Brazzaville is something that is good because it takes you out of your comfort zone and you need to have your A-game on. I also believe our work on regulatory changes and advising and drafting new regulations that are good for both the industry and the government is something that I take pride in.
Despite of all of this, the best milestones for me is taking on big scary oil companies many years ago and besting them in court. They treated people poorly and I had the guts to demand justice for poor Africans and we got it. Their arrogance would not let them be part of any solution, so I knew I have to drag them to court and wrestle with them. Most of us want this beautiful oil industry to change the way it does business and show respect-and we have done just that. To some of the oil companies I was the devil because I stood for African states and African businesses and employees; I really saw it as a badge of honor especially when I knew I was standing up for the little guy. The underdog doesn’t normally have a chance. The system is designed to be against them and I was not going to let anyone bully nor shame me into not fighting back. Companies have gone after me personally, but I’ve got a Teflon view of things and we always beat them back fairly. In Sunday school they taught me how to deal with people and to treat people fairly and that’s something I practice today.
I knew that suing raises interest of the other side faster than you would think so I have no problem suing and negotiating at the same time. I don’t lose sleep over it unless the law is immoral, which I believe it is not.
Many African countries are dependent on natural resources, but very few of them have satisfactory transparency standards in oil, gas and mining, and so it is difficult for citizens to know if they are getting a fair deal for the exploration of their country’s natural resources. What role, if any, can Big Law play in compelling government bodies and the companies that explore these resources to provide key information to make revenue streams more transparent?
I believe law firms play a critical role. Remember, we either want to be social engineers or parasites. That’s the challenge for law firms doing business and making a lot of money in Africa. Most big firms care about one thing PROFIT. They don’t care if Africans aren’t gaining true value from their resources. I think most of the BIG law firms have to take a deep look at the mirror and ask themselves if they are standing on the right side of history. To hire one or two Africans and then pimp them to get business in Africa is not a true representation of diversity at its best. At Centurion we have always believe that we can still do good and make a lot of money at the same time.
In the end it is up to us in Africa to shape our own future. I don’t believe it is the job of some white man to train, educate and create an enabling environment. That’s our job. Colonialism is over and we need to stop playing victims or blaming the white man or the more recently the Asian.
The truth of the matter is that there is a critical link between economic opportunity and prosperity, it shows how free-market, limited-government, rules-based capitalism helps people at every level of society to prosper. Government must embrace that.
Most oil states are still plagued by mismanagement, corruption, abysmal rule of law, poor protection of investment and crumbling infrastructure. This is not helping us. We need to change. We still have a problem in most oil and gas producing states where capital flight now far exceeds inflows of foreign direct investment. This has to change. It does not bid well for a prosperous Africa.
History has shown us that countries that have taken a market-led approach, with the state focused on enhancing transparency and efficiency in the flows of capital, goods, and ideas and maximizing oil investor confidence in the rule of law, the enforcement of contracts, and the protection of labor rights, have always had an edge and become the most prosperous.
There are movements towards regional economic integration that will enhance prosperity but it is too little and the continuous protectionist drive is killing most economies. Why do we have local content? Why can’t we have Africa Content to ensure more African investment and participation in the industry. We need to start thinking big.
How do you anticipate the energy market in Africa changing in the coming year?
I am bullish. The OPEC-Non-OPEC agreement has been a major success. The oil industry responded to price fluctuations pretty much exactly as predicted a year ago. African gas demand is growing rapidly for domestic and foreign use. Gas has been and will continue to be the fuel of choice to replace coal-fired power plants. Nigeria, Equatorial Guinea, Cameroon, Angola, Mozambique, Gabon, Tanzania, Congo and many African countries sit on a lot of gas. Your head will spin if you get the right figures of the reserves. You are going to see a massive investment boom of local investment within for products that use natural gas as a feedstock. Good news is a lot of it if will be done by Africans. Africa’s LNG export volumes are about to rise dramatically with Gazprom in Cameroon, Ophir’s Fortuna in Equatorial Guinea, Anardarko and Exxon Mobil in Mozambique, Total in Tanzania and the new LNG train in Nigeria. With many more export terminals planned to come online over the next two years, this aspect of the natural gas business is poised for a boom around Africa. A lot of good policies are coming, and some heavy-handed regulations are being rolled back. Profitability is significantly improving among IOC’s and NOC’s. If we have an environment of higher commodity prices, lower regulatory costs, rising demand and expanding use for domestic gas and exports all combined creates a more profitable environment for Africa’s oil and gas industry.
If you had to offer one piece of advice to a budding lawyer in private practice, what would be?
Look for mentors and let them mentor you. It’s important to have someone who’s promoting you when you’re not in the room. Next, be stubbornly loyal. Don’t try to pull a fast one because you know more than others! Further, embrace your trials and shortcomings, they teach you to be a better person and lawyer. Also, spend more time looking at the work and find solutions. I have seen too many young lawyers who get a chance to be on a podium and then they tend to spend more time being celebrities than being around colleagues or supervisors. You have not earned a deal and completed a deal so avoid having a big head. It is crucial to have a strong focus on building your skills because clients really want you to be good at what you do. Your writing, critical thinking and in-depth industry skills can’t hurt you. Most clients want to know who is working on their deals and they don’t care about your race or nationality. They want to know you are qualified and can you get the job done.
Commit to work. Cut out a lot of BS. Take a lot of shit as your time to shine will come. Always ask yourself “am I adding value to the firm or the company?” Don’t think you are in the firm to be the labour union representative or the head of diversity. You are in a firm to serve clients and get results. Don’t walk around the firm with arrogance or give off a sense that you are entitled, or your opinion matters on every subject. You are not owed anything. It is important to not cry discrimination on every issue whether is sexism, racism or xenophobia. You beat them with excellence and success. I see it every day. I just work harder, and God knows I always have the last laugh.
You must understand that building a successful practice calls for something not taught in law school; the ability to hustle and deliver on deals. I have always had run-ins with young lawyers because I can be a tough, goal-oriented taskmaster. I have a fierce sense of urgency that many others don’t share. Working for Centurion is not for the naive or the fainthearted - I don’t tolerate young lawyers viewing Centurion as merely a job. Everyone has to give their maximum effort all the time. The truth is I am harder on myself, I am never satisfied and I just believe I can win bigger and do the deal better. The most important outcome for me is to have people around me achieve more than they ever thought they could.
You are a major legal advisor to many African governments. In light of China’s growing engagement in Africa’s mineral sector, and as a major legal advisor to many African governments, how would you advise African leaders to engage to ensure a balanced and mutually beneficial outcome for both parties?
We must admit that China is in Africa to stay. Chinese money is likely to remain among Africa’s top overall lender for the foreseeable future. Is it a win-win, or must African countries make adjustments now to ensure that China does not erode our positive transformations? African states must start inserting specific clauses and conditions that require transparency and a clear understanding of the contracts. Most government officials have little understanding of the loan agreements. We have to address labor and local content issues. More African jobs need to be created and a lot of these investments should go into African companies that are creating value within Africa. Reciprocity is critical in some of these contracts. China has to open its market to (refined) African products in return.
What’s next for Centurion Law Group?
We have invested heavily in our Centurion PLUS business and thanks to the right partnerships from the oil sector, telecom, insurance, technology, mining and governments, we are bullish about 2019. We have invested in world class technology and we will be on track to earning more than anyone ever thought.
I have a voice in the industry and we are going to use this bully pulpit to create a level playing field for many Africans. This is needed now more than ever.
Contact me via email at mfon.nsehe @ gmail.com or Twitter @MfonobongNsehe