It is commendable that the Federal government through the Nigerian National Petroleum Corporation has decided to award nearly half of the 2012/2013 crude oil lifting contracts worth $60 billion to Nigerian companies, thus downsizing the contracts awarded to international oil traders.
I therefore congratulate the successful Nigerian Companies and I hope it will give Nigerian companies the needed leverage to grow and evolve into full fledged International Oil Companies.
The need for Innovation/Intellectual Property Commercialization
At the very minimum however these Nigerian companies need to pay a little more attention to research, development and the resulting innovation which should be protected by Intellectual Property possibly patents.
Oil and Gas Patents
Basically a patent is a document issued, upon application by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent
Patents in Nigeria are of limited duration, typically providing protection for a period of 20 years from the filing of the application for patent grant.
Patents cover things like cutting-edge technologies used in instrumentation, production data capture, horizontal drilling and multilateral wells.
The reality is that Patent Protection “fathered” the Oil Field Service Industry.
Besides, the logistics required to locate, extract, process and transfer crude oil or gas would probably make most companies think twice about even entering the business in the first place. So kudos to companies like Schlumberger Limited, Halliburton, Saipem, Transocean Ltd, Baker Hughes, Fluor, Weatherford International, BJ Services Company, Petrofac, China Oilfield Services Ltd and IBM.
It goes without saying that companies in the oil field service industry, would probably not have been formed and would not continue to exist today without protection of its Intellectual Property!
Commodity Sellers vs. Proprietary Industry…
If the products of Oil Field Service companies were not protected by patents, they would have been priced as a “commodity”.
If their products had been priced as a “commodity”, they may not have been developed and made available to the industry.
The thing is that Intellectual Property Rights are enforceable against the whole world while Contractual Rights are enforceable against only the parties that enter into contract with you!
Commercialisation of Patents and Trade Secret
Patents are public documents which disclose information about the invention (technology) in exchange for state protection, which is the exact opposite of trade secret protection. However commercialisation of patents and trade secret is always a desirable option. Sometimes trade secrets are licensed along with patent rights, in what is called a“hybrid” license.
Thus for our Oil and Gas companies to grow, they are going to have to take their innovation and resulting Intellectual Property like patents and trade secrets seriously, because that is what gave birth to the Oil Field Service Industry in the first place and that is what keeps them in business, the right to exclude others from selling or even using proprietary equipment without permission and hefty license fees!
Intellectual Property becomes a valuable asset to the oil and gas company, when it is registered and steps are taken to prevent competitors from accessing and using it for free.
Olufola Wusu Esq.
Copyright © 2012
Counsel with Megathos Law Practice