By Etuka Sunday
The Minister of State for Petroleum Resources, Chief Timipre Sylva has said, there was no going back on the full deregulation of the petroleum downstream sector of the economy.
Sylva stated this at the Virtual & Limited in person 21st Edition of the Annual Oloibiri Lecture series and Energy Forum (OLEF 2021) organized by the Society of Petroleum Engineers, (SPE) Nigeria Council in Abuja to commemorate the first oil-well discovery in Nigeria.
SPE Nigeria Council is a not-for-profit technical association of petroleum industry professionals working in the Nigerian oil and gas industry.
The minster who spoke about cost reduction in the upstream petroleum sector, said, market driven price of Premium Motor Spirit (PMS) was being considered to complete the full deregulation of the white product in Nigeria.
He said, the covid-19 pandemic has broadened the need for operational excellence to the oil and gas industry which for the purpose of the occasion could be viewed as a mindset that embraces certain strategy to create sustainability improvement within the industry in recognizance to the global pandemic crisis, unstable crude oil prices and the race for energy transition to renewables.
He said, he viewed petroleum optimisation as a process of selecting the best assets out of numerous available. This, he said, guarantee cost effective and maximum expected returns for investors and appropriate take for the government.
He said, if PIB is passed into law, it would not only guarantee a robust Uptstream Fiscal framework beneficial to both government and investors, but would also unlock several midstream gas opportunities to further enhance domestic gas utilisation.
Also speaking, the Group General Manager (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari said, the growth in the Oil industry led to an escalation of oil industry operating costs drivers (notably HR, Logistics, Security, Direct Lifting and Operation Maintenance) which became a major source of concern to all stakeholders.
He said, although some of the reasons for the rise are attributable to global economic factors, a significant part of it is due to operational factors.
The GMD said, the Industry was forced to curtail spending as it grappled with the challenges of sustaining current production levels, drilling operations, funding future growth and maintaining positive cash flow.
According to him, there have also been declining investments in Oil and gas explorations which will further affect the growth in the market.
“In view of the prevailing circumstances, a quick intervention strategy was adopted across the industry to reduce the Unit Operating Cost (UOC) through deliberate efforts notably-renegotiation of ongoing contracts, deferment of capital spends and process optimization,” Kyari said.
He said, in today’s business environment, the focus on process efficiency, cost reduction and portfolio optimization have become key in positioning the industry for the future.
Earlier, the Executive Secretary, Petroleum Technology Development Fund (PTDF), Dr. Bello Gusau said, the fund was ready to support any positive initiative of the industry especially with regards to building capacity.
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