International Oil Companies operating in Nigeria have identified how Nigeria can ensure competitiveness in the global oil industry.
The Chief Executive Officers of the multi-national oil companies who spoke at the 2021 Nigerian International Petroleum Summit (NIPS) in Abuja on Wednesday identified security, policy consistency, respect to sanctity of contracts to attract investments as well as improved technology to boost production capacity.
For the Managing Director/Chief Executive Officer of Seplat Plc, Roger Brown, technology would play a key role in ensuring Nigeria stays cost competitive in today’s global oil market.
Brown stated this in his address titled, “Oil Market Forum: Who Is In Control?”
He said with the International Energy Agency (IEA) setting out a road map to what it believes is required to achieve net carbon zero 2050, coupled with oil prices rising on COVID-19 pandemic recovery, traders betting on sustained revival in oil demand and the activities of OPEC/OPEC+, Brown said the end consumers, suppliers of energy, governments / regulators and providers of capital could be in control of market outcomes.
Given the current market realities, he said Seplat has identified cost savings initiatives, flexibility to scale projects, promotion of innovation and gas resource development as major value drivers for all its stakeholders.
Urging operators and other stakeholders to heighten their priority to increase operational efficiencies and reduce costs, Brown said the use of high caliber remote working technologies, adopting new systems, new habits and new patterns that have emerged and impacting work processes would be crucial.
“There is the need for pursuit of strategic new opportunities and streamlining operations. Portfolios have been reshaped and capital reallocated to the highest-return opportunities, that is, those best aligned with future value creation and sources of distinctiveness.
“Environment, Social and Governance (ESG) principles are now key drivers in how companies plan for long term growth; thus the responsibility of companies to undertake gap analyses and ensure that sustainability thinking is embedded across the organization is very critical at this time,” the Seplat CEO said.
On oil and gas engagements, Brown urged Nigeria to reduce operational costs, aim to be lowest quartile producer, drive technological development using Artificial Intelligence; ensure lower costs to market, promote free market pricing for domestic gas with the right fiscal or other incentives, and balance LNG development with Domestic Gas – developing both.
On electricity, he advised the country to move away from off grid diesel generation, improve electricity supply chain and develop on grid gas as a catalyst for on-grid renewable energy.
For biomass, Brown called for the development of the liquefied petroleum gas (LPG) and compressed natural gas (CNG) markets, and reduction of reliance on biomass, by arresting deforestation.
He also advocated for a balance of environmental and social development, while delivering the 17 Sustainable Development Goals (SDGs).
In embracing changes and controlling its future, he said Seplat was investing in its people and motivating them by providing a safe working environment and career development opportunities; pursuing profitable and sustainable new opportunities; driving energy transitions in its sectors and improving access to affordable and greener energy; and being a responsible and accountable corporate citizen, understand local issues and positively contributing to host communities.
Seplat, he said, is also improving profitability, maintaining strict cost control and implementing the most appropriate technologies whilst creating value for all stakeholders.
The Managing Director of Shell Petroleum Development Company (SPDC), Osagie Okunbor, who spoke also during the CEOs Roundtable session called for improved security in the country and consistency in implementation of policies in the oil and gas industry to guarantee a conducive environment for the industry to grow.
Okunbor said the challenge with the country’s oil and gas industry was not lack of policies, but being consistenr with the ones in existence.
“Our problem, frankly speaking, is not policies; it is not the framework.
Our problem is the execution, to essentially get the projects that derive from these policies to bring them to fruition.”
The Managing Director of ExxonMobil Nigeria, Richard Laing, underscored the importance of tightening of security to bolster investments in the industry.
Laing called for a strict adherence to the sanctity of contracts by the government.
In his contribution, the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, said the national oil company has ensured transparency and accountability in the management of its relationship with its partners under a reform agenda that finds accommodation for cost optimization and enhanced productivity.