By Sebastine Obasi
Nigerian Association of Petroleum Explorationists, NAPE, has identified long contracting cycle as the major factor creating sluggish business climate in Nigeria.
The President of NAPE, Ajibola Oyebamji, who stated this at a media briefing in Lagos, also said that Nigeria is at risk of long-term disruption to oil and gas supplies, power generation, a collapse of industries and significant loss of revenue due to continued reduction in hydrocarbon exploration activities.
He explained that reduction in hydrocarbon exploration and exploitation has dire consequences for a country like Nigeria with a mono-economy hinged on crude oil. Oyebamji said, “Procurement and contracting cycles in the Nigerian oil and gas industry is about 36 months, making it the longest and most inefficient in the world. The long contracting cycle results in high levels of uncertainties in costing and planning thereby creating a sluggish business climate.
“Insecurity, oil theft and illegal refining are bigger threats to the oil and gas industry in Nigeria than the declining price of oil. The current low oil price is rather a reflection of an over-supply of oil in the world market.
“In Nigeria, the low oil price regime has led to dwindling reserves, more burdens on foreign reserves, pressure on infrastructure and social services, inability to meet commitments to institutional lenders and the list of untoward outcomes is long.
“Technology is the heart of all the significant achievements in the oil and gas industry. The way hydrocarbon is discovered, developed and produced, has been impacted by evolutionary technologies that have emerged since the Drake well of 1895. But the challenge is how far has Nigeria travelled down the technology road?
“With the new era of disruption blowing across virtually all industries, now is the time to embrace new technology, as sustained low oil prices are driving the adoption of digitization across the oil and gas industry.
“It is against this backdrop of the foregoing that the Nigerian Association of Petroleum Explorationists, NAPE, will at its 37th annual international conference and exhibition be deliberating on the petroleum business and the regulatory environment with a view to addressing the challenges of exploration and production in the onshore, offshore and Nigeria’s frontier basins, as well as seek new approaches for exploration and production in the cretaceous and cenozoic basins.”
He also said that the conference is scheduled to hold from November 17 to 21. Mele Kyari, the Group Managing Director, Nigerian National Petroleum Corporation, NNPC, is expected be the special guest of honour.