The Nigerian Association Petroleum Explorationists (NAPE) has lauded the Federal Government’s efforts on oil discovery in Gongola basin, saying it was significant to oil and gas industry for national development.
Mr Ajibola Oyebamiji, the NAPE President gave the commendations at a news conference in Lagos on the association’s forthcoming 37th Annual International Conference & Exhibition conference.
The conference is themed: “Expanding Nigeria’s Petroleum Landscape: Digitalization, Innovation and Emerging New Technologies.
Oyebamiji said that the discovery of hydrocarbon deposits in the Kolmani River II Well on the Upper Benue trough, Gongola Basin, in the North-Eastern part of the country was good for industry.
According to him, the discovery was a core significant development that it’s long awaiting.
“The discovery of oil and gas in commercial quantity in the Gongola Basin will attract foreign investment, generate employment for people to earn income and increase government revenues.
The president said participants at the conference would be deliberating on the petroleum business and the regulatory environment with a view to addressing the challenges of exploration.
He said that it would also address the production in the onshore, offshore and Nigeria’s frontier basins, as well as seek new approaches for exploration and production in the Cretaceous and Cenozoic basins.
“The conference will also be beaming its searchlight on new technology application in exploration and production using big data, digitalization, data analytics, artificial intelligence opportunities, etc.
” Participants at the conference will also be discussing the contributions of indigenous/marginal field operators and the imperatives of growing national reserves and grooming the next generation of E&P professionals.
According to him, there are some observations about the Nigerian petroleum landscape.
Oyebamiji noted that Nigeria was at risk of long-term disruption to oil and gas supplies, power generation, a collapse of industries and significant loss of revenue due to continued reduction in hydrocarbon exploration activities.
He said reduction in hydrocarbon exploration and exploitation had dire consequences for a country like Nigeria with a mono-economy hinged on crude oil.
“The procurement and contracting cycles in the Nigerian Oil and Gas industry is about 36 months making it the longest and most inefficient in the World.
“The long contracting cycle results in high levels of uncertainties in costing and planning thereby creating a sluggish business climate.
“Insecurity, oil theft and illegal refining are bigger threats to the oil and gas industry in Nigeria than the declining price of oil.
“The current low oil price is rather a reflection of an over-supply of oil in the world market.
“In Nigeria, the low oil price regime has led to dwindling reserves, more burdens on foreign reserves, pressure on infrastructure and social services, inability to meet commitments to institutional lenders, and the list of untoward outcomes is long,” he said.
The association’s also decried the decline in crude oil price at the international market.
Crude oil price was selling at $81.03 per barrel in October 2018 but fell to $58.09 per barrels as at 16th October 2019, this represents over 28 per cent decline in one year.
Oyebamiji, stated that the association observed that the low oil price regime has led to dwindling reserves, more burdens on foreign reserves, pressure on infrastructure and social services, inability to meet commitments to institutional lenders.
He also argued that other challenges bedeviling the oil and gas sector which stakeholders will address at the conference include the procurement and contracting cycles which is about 36 months making it the longest and most inefficient in the world.
“The long contracting cycle results in high levels of uncertainties in costing and planning thereby creating a sluggish business climate,” he said.
He however concluded that there is an improvement, but the reality is that we still find that the contracting cycle still exceeds what ought to be for investors, especially for the International Oil Companies (IOCs) who needs quick decisions.
“They need a shorter contracting cycle, shorter time to achieve this. In some other countries, even nine month is too much not to talk of between nine months to 36 months. Though there is little improvement in some areas but it is not all encompassing, it doesn’t cover the entire life cycle of oil and gas projects,” he said.
He said it is against the backdrop of the foregoing that NAPE will at its 37th edition of its annual conference be deliberating on the Petroleum business and regulatory environment with a view to addressing the challenges of exploration and production in the onshore, offshore and frontier basins.
