By Prince Okafor
Amidst continued pressure on oil revenue due to the low crude oil prices Managing Director/Chief Executive Officer, Total Exploration and Production, E&P, Nigeria Limited, Mr. Nicolas Terraz, has outlined some survival strategies for the industry operators.
Terraz who spoke at the just concluded Nigeria Association of Petroleum Explorationists, NAPE, Annual Conference in Lagos, noted that these are trying times for the Nigerian economy and the oil and gas industry, but indicated that the situation also presents a great opportunity for change and to take a whole new look at the present way things are done in the industry with a view to being more efficient and innovative.
He said that, the current crude oil price regime requires the country’s oil sector to adapt and reduce cost without compromising safety while preparing for a future growth or expansion.
According to him, ‘‘we must optimize our operations by improving our production efficiency and our facilities, and also maintaining production plateau for as long as possible with good reservoir management, infill drilling, pressure maintenance and by taping nearby satellites.
”The current market situation also means that investment decisions have come under much more scrutiny by all stakeholders, focusing increasingly on value and profitability while maintaining the capacity to accommodate future recovery.
“For new development projects, value engineering and good enough design are becoming the norm to ensure that new projects are robust in the current environment’’, Terraz said.
He however noted that in the current environment, petroleum laws and regulations should seek to encourage investment and prepare for the future, adding that regulations need to provide a robust framework that is conducive to investment and flexible enough for various economic conditions and prices of oil.
He stated: “This is particularly true for deep offshore projects, requiring a very significant initial capital outlay. If we are able to put in place laws that create a win-win situation for all stakeholders, then Nigeria would have laid a solid foundation for a sustainable future.
“To improve the situation, investments can be encouraged by providing attractive fiscal incentives that will encourage low-cost production and reserve additions through exploration. In difficult times, continuous innovation is important’’.
Terraz said that his company delivered, Akpo deepwater project in 2009, when oil prices were just recovering from a level below $40, adding that it is very important that Nigeria comes out of recession even more robust as it is an opportunity for the industry to rejuvenate.