Thursday, 28th March 2024
To guardian.ng
Search

‘NAPE’s contribution to oil, gas sector significant’

By Editor
14 November 2016   |   4:17 am
Well, yes for over a century now new technologies have changed the way reserves are identified, developed and produced. New technology has improved the quantity and quality of information available....
Nosa Omorodion,

Nosa Omorodion,

Mr. Nosa Omorodion (FNAPE) is President of the Nigerian Association of Petroleum Explorationists (NAPE). In this interview, he spoke on the impact the organization has made on its membership and the oil and gas industry generally.

In these challenging times for the oil and gas industry, do you see technology playing a key role on the road to recovery?
Well, yes for over a century now new technologies have changed the way reserves are identified, developed and produced. New technology has improved the quantity and quality of information available about different geological structures and this has enhanced the likelihood of finding oil and gas. I will give an example, today many new tools enable us to find deeper and harder to reach fields.

As a matter of fact, it was technology that literally extended the reach of the industry in grilling into frontier fields and deeper depths. Additionally technology also helps to unlock new oil in old fields. I must commend the federal government’s intensified and intentional efforts in finding hydrocarbon in frontier basins. Finding more oil from these other fields will improve our reserves base and mitigate the short fall in production arising from disruptions in the Niger Delta. I will like to say that our Pre- Conference Workshop this year will be focusing Stimulating Investment opportunities in Nigerian Frontier basins.

One other way technology has helped is in transforming resources once thought to be unconventional into conventional ones. Don’t forget that only forty years ago, all offshore oil was considered unconventional. Today, this portion of total global oil supply accounts for 30%. Improved technology has improved recovery rates and extended the life of existing fields and some fields feared to be depleted have been brought back to life.

What impact has the low oil price environment had on exploration in Nigeria?
The inevitable slowing down of the economy occasioned by the adverse crude oil prices regime still persists. Before Nigeria officially acknowledged we are in a recession, low oil prices had resulted in the slowdown in projects as well as the stopping of exploration activities in some fields. In the upstream, there had been a sharp cut -back in projects with companies instead focusing on short term production.

Nigeria currently maintains an economically unstable negative net energy trade balance in which the nation exports virtually all the crude oil produced and imports a substantial part of its refined petroleum products needs while under-utilizing other energy sources such as bitumen, coal, lignite, and shale oil, thereby leading to a monoculture economy that is largely dependent on crude oil export.

The low oil price regime has lead to dwindling reserves, more burden on foreign reserves, pressure on infrastructure and social services, inability to meet commitments to lenders; I can go on and on. Reduction in hydrocarbon exploration and exploitation has dire consequences for a country like Nigeria with a mono- economy hinged on crude oil. Reduction in hydrocarbon exploration has resulted in declining oil and gas reserve base. It is not rocket science to draw the conclusion that Nigeria’s aspiration of 40 million barrels reserve base and 2.2 million barrels a day production quota is at best elusive.

To make matters worse, increased competition from emerging African frontier plays is impacting on Nigeria’s position in the industry. Government must seek for more innovative and cost effective ways to increase reserves. Review and re-negotiate contracts; re-evaluate portfolio to understand why a portfolio is dormant or underperforming and take steps to guarantee reasonable return. The oil and gas industry must also focus on operational optimization to drive efficiency as well as embark on re-engineering of business models.

On the upside, it can be a blessing in disguise as it allows focus on other sectors. It can be the wake-up call we need to look inward and innovate to maximize other resources and potentials. The manufacturing sector is yet to pick up. The agro allied and non- oil sectors can become major revenue contributors. I read recently that we have witnessed unprecedented success in our IGR drive. I hope we can sustain this while at the same time we do not take our feet off the pedals in our drive to truly grow the economy.

In this article

0 Comments