Nigerian Oil and Gas industry operators say the sector can grow in volume and margins despite currently low crude prices if transparency is enshrined in policy formulation, implementation as well as in business practices transparency in policy formulation and doing business should lead to more collaboration and increase investor confidence even in a low oil price environment.
Transparency in the operation of the international oil companies and marginal field operators it was said will help to attract financing, improve structure and operation, straighten challenges in regulation and reduce contracting cycle time and operational risks.
This was the key summation at the 40th edition of Society of Petroleum Engineers, Nigeria Annual International Conference & Exhibition (NAICE 2016) with the theme ‘Transparency in the oil and gas business: an imperative for energy security and stability’ which held at Eko Hotels and Suites, Victoria Island, Lagos.
“Transparency in the oil and gas remains the panacea to improve the investment climate based on the similar rate of returns in all other regions,” said George Kalu, Chairman Society of Petroleum Engineers, Nigeria in his opening address.
In the same vein, Clay Neff, Chairman of Chevron Nigeria and Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry who was one of the speakers at the event said that the international oil companies (IOCs) have a critical role to play to ensure transparency in oil exploration and production.
“Increased awareness of the importance of transparency in our operation has led to more open engagement with regulators and government agencies including NAPIMS and NCDMB.
“This greater awareness has led to better cooperation with NEITI in its audit reports; there are clearer contract and tendering processes, managed more fairly and close contact with regulators
He called attention to key challenges facing the oil and gas business in Nigeria prominent of which are security especially with militant activities in the Niger Delta, efficiency of cash call funding and low oil price environment.
Industry operators at different panel discussion maintained that regardless of the recent challenges of vandalism and outright destruction of oil and gas facilities which has crimped production to barely 1 million barrels production per day, reducing power generation ability cutting federal government budget by over 46 percent, Nigeria can still remain globally competitive if upstream technical cost is kept lower than $20 per barrel.
“To achieve this, there is need to strengthen and grow our local refining capacity to at least 1.2million barrels per barrel a day by 2020 and 3BCF of gas within the same period,” said Austin Avuru, managing Director of Seplat in his presentation.
Avuru said that the challenges the country is currently facing at the moment is enormous considering that about 70 percent of onshore and shallow waters production are shut in for about 5 months now.
“In spite of the current challenges, there is light at the end of the tunnel”, Avuru said.
Stakeholders identified the need to tackle the challenge with the security in the Niger Delta, improve access to finance for marginal field operators and make the operational environment more stable and sustainable.
SPE NAICE is West Africa’s foremost technology conference and has held annually since its inception in 1976 with a focus to collect and encourage the dissemination of technical knowledge and technologies relating to the oil and gas industry and to provide an E&P market place for Sub-Saharan Africa.
Over the years NAICE has grown to become one of the largest upstream oil and gas event in Africa attracting industry regulators, high level government officials, and petroleum technology professionals at all levels, as well as other very important oil and gas industry stakeholders.
Olusola Bello, Frank Uzuegbunam, Kelechi Ewuzie & Isaac Anyaogu
