GIFT ROBERTS
Shell Petroleum Company has said it would help Nigeria’s oil and gas sector recover its operational efficiency by offering a number of actions to help in attracting steady investment inflows.
The Manager Shell’s Development for Nigeria, Mr Sam Ezugworie, in a presentation he made recently at the Society of Petroleum Engineers, in an annual Oloibiri Lecture Series and Energy Forum, explained that by integrating operational excellence, prioritising low oil cost production, renegotiating contracts and assigning capital based on values and adopting a data-driven system of decision-making to improve productivity and reduce cost, could help the sector regain its declining efficiency level.
He stated that at $28 per barrel cost of oil production, Nigeria remained an expensive and unsustainable jurisdiction. It added that Britain and Brazil with $44 and $38 per barrel respectively were the others ahead of Nigeria in this regard, while Saudi Arabia, Iran and Iraq have low rates of $9, $9 and $11 respectively.
According to the Group Managing Director of Aiteo Eastern E&P, Mr Victor Okoronkwo, the oil and gas industry is still grappling with the aftermath of the twin tragedies of the dramatic crash in oil price on one hand and the collapse in demand on the other hand which was influenced by the covid-19, have made Nigeria and other producers to adopt a new model in their oil business.
“The oil and gas industry is still grappling with the aftermath of the twin tragedies of the dramatic crash in oil price on one hand, and the collapse in demand, on the other hand, both tragedies triggered by the COVID-19 Black Swan.
“This phenomenon has accelerated new paradigms in portfolio optimization and supply chain balance in the industry. With the price volatility, the geopolitical tussle between Russia and Saudi Arabia experienced during the first wave of global COVID lockdown, financial leadership and liquidity risk management will remain major areas of focus for upstream oil and gas companies,” he said.
Okoronkwo also said that digitalisation and big data have also, become a key tool for success in the industry and will gain even more prominence in a post-COVID-19 era, emphasising the growing role the industry has experienced as a result of digitisation.
“The lockdown has demonstrated that with increasing speed and capacity in connectivity (like 5G), digital tools are no longer just enabling communication.
“The industry is not out of the woods yet, despite the promising trends in price being influenced by OPEC+ production cuts. The unprecedented discovery, approvals and now the application of COVID-19 vaccines hopefully should help contain the pandemic and economies will start opening again.
“They are providing and indeed accelerating opportunities for value creation and value capture through enterprise integration, communication across multiple social media, remote monitoring, and task automation, all to enhance operational efficiency, integrity, and process safety.
“So today digitalisation is no longer an option but a fundamental requirement for companies to go leaner and to remain competitive particularly in this era of energy transition.
He further said that a successful implementation of digitalisation in the industry would require amongst other things, collaboration across multiple industry stakeholders including investors, leaders and even policymakers, noting that ensuring fiscal and regulatory clarity in the sector through the passage of the Petroleum Industry Bill and by encouraging strategic partnerships for policy co-creation, innovation and Research and Development (R&D), as well as building a diversified, resilient and competitive portfolio for a sustainable future remained essential to keep the sector competitive.