Technology key to firms’ survival in low oil price regime

For oil and gas stakeholders who gathered at the just concluded Offshore Technology Conference (OTC) in Houston Texas, by implementing technological solutions, the industry will be able to retain a high level of production and at much lower costs.

Along with the high-tech displays and gee-whiz presentations that highlighted the yearly event, the conference featured sessions on how to reduce operating expenses and extend the lives of aging oil and gas fields.

OTC Chairman, Joe Fowler stated that many of the 300 papers presented focused on techniques and equipment to bring down the high cost of offshore drilling to make it more competitive in a low-price environment.

More than 68,000 attendees from 120 countries gathered at the yearly conference, placing 2016’s OTC among the top 15 highest attended in its 48-year history.

Speaking at the event, the Chairman of PETAN, Mazi Bank-Anthony Okoroafor, emphasized the need for oil and gas operators to invest in technological advancement to effect cost reduction.

He also stressed the need for focus to be placed on existing in-country capacity instead of patronage.

He added that the country should actively pursue reserves and production growth, which he said, has been on the decline.

Okoroafor emphasized on leveraging proven Nigerian companies and in-country capacity building, adding that proper implementation of the Nigerian oil and gas industry content development will significantly drive down the cost of doing business in the oil industry and cushion the effects of the low prices.

He stated: “The industry has operated under the local content Act regime for six years now, there is the need to take a closer look at the implementation strategy to ensure it is delivering the desired value to various industry stakeholders in particular and the Nigerian populace in general, proper implementation of local content will lead to massive economic transformation of our great nation”.

Chairman, PETAN Conference Committee, Ranti Omole, stated that based on the belief of indigenous companies, the association is partnering to reduce cost of operations and projects in Nigeria through increased local patronage.

He stated: “The industry has been undergoing challenging and turbulent period for the past two years due to low prices of crude oil and low demand. This has resulted in severe adverse consequences in the industry as well as on the economy of many oil producing nations including our country. This has led major players in the industry to rationalize their operations, seek efficiencies and cost saving measures to ensure profitability and survival of their businesses.”

The Acting Executive Secretary, Nigerian Content Development and Monitoring Board, Daziba Obah, said with the right support and environment, indigenous companies are best positioned to provide services and process at most lower cost without compromise to standards.

Obah added that there is opportunity to leverage the low value of the naira to source services, technology and solutions local at much cheaper cost.

He noted that there will be much more cost savings if operators develop increased project management capabilities to manage projects. “Operators will save costs by optimizing existing facilities and improving maintenance efficiencies.

Dwelling on the role of the Federal Government to help save the indigenous companies from the pangs of crude oil prices, former Chairman of PETAN, Emeka Ene, he said that there is need to develop the steel sector for local production of steel billets, coils and plates.

Ene added that government should accelerate gas infrastructure along source corridors to ease availability of the commodity in oil and gas parks, oil and gas free zones and other manufacturing locations supporting oil and gas activities.

He stated: “There is need to engage relevant agencies to foster cordial and seamless working relationship with respect to expatriate quota and issuance of work permit. There should also be a periodic industry-wide capacity audit of local companies to establish current capacities and embark on gap closure interventions. Research and development clusters should be encouraged to promote the development of home grown technology”.