… as banks stop lending, firms sack more labour
By Udeme Akpan
THERE are indications that the continued low oil price has further destabilised operations in Nigeria’s oil and gas industry.
Investigations by Sweetcrude showed that the situation was fuelled by many problems, especially significant drop in projects, contracts and bank lending.
Mazi Bank-Anthony Okoroafor, chairman of Petroleum Technology Association of Nigeria, PETAN, disclosed in an interview that: ‘’the last two years have been challenging for the oil and gas industry. We have seen the price of crude oil crash.
‘’Within two years, we have seen projects deferred and cancelled. We have witnessed slow oil and gas activities. We have also seen banks afraid of lending money to sector players.”
Specifically referring to PETAN, he indicated that: ‘’PETAN has been affected greatly because the oil and Gas industry in Nigeria is in a state of coma. Activity level is low. We do not know the status of major projects like Bonga SW, Zabazaba.
‘’Projects have been delayed, deferred or cancelled. PETAN companies that have built capacities and capabilities are laying off well trained personnel. Banks are no longer lending, there is a tightened access to capital with decreasing cash flows, highly leveraged companies are struggling as lenders and investors tighten access to capital.
‘’For operators, this is limiting their ability to continue exploration and development activities which starves service companies of jobs. Rig count is low, well intervention and well completion activities are low. There is increasing pressure to reduce and control costs.”
He said that: ‘’There are no activities. The oil and gas industry is dying. Service industries that have built capacities and capabilities are laying off workers. There is the problem of insecurity. The delay in passing of the Petroleum Industry Bill, PIB, has made Nigeria to lose lots of projects to other countries.”
Meanwhile, the Organisation of Petroleum Exporting Countries, and others intensified efforts to achieve increased stability in the global oil market.
It stated that: ‘’OPEC and participating Non-OPEC producing countries have started 2018 with an outstanding conformity level with their voluntary production adjustments, according to the OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC).
‘’The JMMC’s Joint Technical Committee has reported that participating countries have in the month of January 2018, once again, broken their conformity record, achieving a level of 133%.
‘’The JMMC was established following OPEC’s 171st Ministerial Conference Decision of 30 November 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016.”