The Petroleum Technology Association of Nigeria (PETAN) is one of the oil technical association that houses operators in the service industry. PETAN has many members that have thrived in the service industry. During its 2017 Annual Oil Dinner and Awards Ceremony that was graced by captains of industry both the International Oil Companies (IOCs) and its indigenous counterparts, Okoroafor commended the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) who has been supportive to indigenous operators in the country.
He noted that the industry is gradually finding its feet after set back due to low oil price. The government has improved on gas infrastructure while indigenous companies have contributed immensely to the country’s production. Speaking with energy correspondents, Okoroafor advised the government to maintain peace in the Niger Delta in order to enable operators meet their aspirations. Excerpts:
What is your assessment with today’s event?
The event went well, all our invitees came, the Group Managing Director of NNPC, the CEO of Chevron, the CEO of Total E&P and the CEOs of most IOCs, Bayo Ojulari, Managing Director of SNEPCO, Austin Avuru, the Managing Director of Seplat, most of the CEOs and Captains of industries including top leaders of NNPC were all present at this event.
Is this an endorsement of indigenous operators in Nigeria?
The GMD of NNPC has always supported indigenous operators including the IOCs and PETAN. The man is passionate about local content. Anything that moves the industry forward, he supports 100%. We are happy because he is present here to support the industry that he loves.
The year is going to end, what is your assessment of 2017 oil and gas upstream sector activities?
There are mixed feelings, the oil price was down but now it has stabilized. Initially, a lot of budgets were deferred but things are picking up gradually in the industry. If you watch, the same 2017, oil and gas policy was signed by the Federal Executive Council, NNPC signed off from the JV cash call with the IOCs comprising of Chevron, Shell, ExxonMobil, Total E&P, Eni and a lot of bullish things were done to move the industry forward.
What is the impact of these policies and MoUs that were signed?
For example, the gas policy puts more emphasis on gas and operators can explore for gas. There is more emphasis on building gas infrastructure and nice fiscal terms for gas to attract investors. There are lots of emphasis to build the gas market.
On the emphasis on gas, you did not include licensing rounds, how can a firm explore for gas without a licence?
When you are given a field to explore, you have oil and gas in that field even an acreage. It is easier and cheaper for you to get out oil and sell it. It is more expensive to build gas infrastructure. Operators ignore gas but now with a lot of emphasis on gas, it will not be ignored since there is so much opportunities for gas.
During Avuru’s presentation, he said the indigenous oil companies have thrived to some extent in gas production compared to oil exploration. What’s your take about his position?
That is not what Austin Avuru said, he made it known that Seplat has produced a lot of gas including oil exploration. Aiteo is an indigenous company and it is producing 70, 000 barrels of oil per day. Eroton another indigenous company is producing about 50,000 barrel of oil per day as well. A lot of indigenous companies are doing well in terms of oil exploration. Seplat has done a lot on gas and PETAN congratulates the company for its achievement. Basically, with nice fiscal terms on gas now, there will be more on gas.
With all these activities you have said, what has been the impact of service providers especially the contractors? And what will the future looks like with stability of oil price?
The future is going to be great because people will invest more. When oil price is high people will invest on projects and it will lead to drilling activities including a lot of rigs. Oil services will improve throughout the entire value chain while jobs will be created.
Do you see oil price stabilizing at $60 per barrel because it has been speculated that in 2017 there will be gloat of oil from some of the forecast?
If you look at what is happening now all over the world, there are new discoveries and Shell production is becoming more efficient with OPEC sticking to the cut till the end of 2018, the price of oil may be hovering between $60 to 65 per barrel in 2018 assuming there is no major disaster in any of the geo-political zones. Also, in our home front, government must do everything within its power to continue to maintain peace in the Niger Delta because without peace in that region, all operators’ projections will be in vain. There was a time the country was losing $66 million every day because of disruptions. Whatever the government needs to do to maintain peace in Niger Delta is a recipe for us to continue with normal production.