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COVID-19: IOCs, indigenous firms, others scale down operations ― Investigation

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…Suspend new contracts

….As Price of Bonny Light drops further to $22.20 per barrel

COVID-19, IOC, Operations

By Udeme Akpan

The International Oil Companies, IOCs, indigenous oil companies and servicing firms have further scaled down their operations as the price of Bonny Light, Nigeria’s premium oil grade has fallen from $23.42 to $22.20 per barrel in the global market.

An investigation by Vanguard indicated that the spread of Coronavirus, which has affected about 174 Nigerians, have affected the projections of stakeholders, especially the Federal government, that had budgeted to generate $57 per barrel from the export of 2.3 million daily for the funding of its 2020 budget.

However, in an interview with Vanguard, the former chairman, Petroleum Technology Association of Nigeria (PETAN), Mazi Bank-Anthony Okoroafor said: “The past two weeks have been horrendous for the oil and gas industry. We are experiencing a global collapse in demand from the measures taken to counter the spread of coronavirus as refineries around the world are processing less crude oil with transport demand hammered by grounded airlines and fewer cars on the roads as countries lockdown commerce to fight the coronavirus.

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“Brent crude fell to $23 a barrel on Monday morning, its lowest level since October 2002. Oil prices have fallen by more than half in the past month as companies cut back or close production. The coronavirus has created a demand shock, which has kept millions at home across the world and wiped out heavy demand for oil that would normally keep planes, cars, and businesses running.”

Cuts

Mazi Okoroafor, who is also the managing director/CEO, CB Geophysical Solutions Limited, said: “The major IOCs have started quick production and spending cuts. They are sending all employees other than those in critical roles to work from home. Investments in exploration and development have all been pulled back. There has been cut in drilling rigs. No new contracts for now. No one is discussing new projects.”

New projects

According to him, “The lockdown is preventing crew changes and movement to job locations. No one is discussing new contracts/projects now. The new paradigm now is survival.

“People are our greatest assets and at the moment what is uttermost in the service companies is ensuring our workers are safe from harm.”

Oil servicing

Mazi Okoroafor said: “Most services are shut down at the moment. Lockdown restricts the movement of people and equipment and the fear of coronavirus is impacting seriously on all workers.

“The IOCs working are those on locations before the lockdown. With zero revenues now to the service companies, keeping many workers moving forward depends on how long this problem lasts.”

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Advice

He advised everyone to “Stay at home to reduce the transfer and spread of the virus. All attention for now should be focused on addressing the coronavirus pandemic.

“The Federal Government, IOCs, and others are already implementing social distancing and lockdowns to reduce the spreading of this dangerous virus. We all need to support them to create more awareness to all the communities in our country. These should be the focus for now.”

Recently, the Group Managing Director, Nigerian National Petroleum Corporation, Mallam Mele Kyari, had noted during the donation of 17 items to the Isolation center, University of Abuja Teaching Hospital, Gwagwalada, Abuja, that prevention remains the only known defence against the pandemic.

He had said: “We are all part of history. The year 2020 will go down as a year of the first major pandemic in the modern world. We are acting locally as part of the global effort in combating this scourge. Our response today, therefore, will go a long way in determining how well history will judge us.

“We will support government agencies in providing urgently needed resources, human and material, required to curb this menace. The government alone cannot do this. Health systems world over are getting overwhelmed.

Vanguard

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