By Sebastine Obasi,
LAGOS — The gloomy atmosphere being experienced globally in the oil and gas sector may not last long as the Managing Director of Seplat Petroleum ahan $60 a barrel in 2017, an outlook other energy analysts say they share.
Avuru said: “We believe that by end 2017, the market will determine the equilibrium price which will be in the neighbourhood of $60 to $70 per barrel.”
He explained that currently, most oil companies, especially the independents, are cash negative because banks are reluctant to lend money to them.
This, he said, had led to redundance in the sector further, resulting in the 57 per cent of land rigs being rendered unoperational.
According to Avuru, Seplat had seven operating rigs in 2013, none of which is working now due to the lull in the sector.
“Service companies are the worst hit. If there is no production, the rigs will be redundant,” he said.
Also speaking, Managing Director of Chevron Nigeria Limited, Clay Neff, saidNigeria had lost about $21 billion investment due to the dwindling oil prices and lack of investor confidence in the country in the last two years.
Cleff also said Nigeria’s focus areas should be to improve its competitive position by restoring investor confidence as well as ensuring the security of lives and properties.
According to him, Nigeria should provide globally competitive fiscal terms, solve joint venture funding challenges and payback areas and ensure contract stability, as well as simplify approval process. “Nigeria should create favourable conditions for sustained investment,” he added.