May 12, 2020

Covid-19: FG, Independents in talks for the survival of oil sector – Oando COO

Covid-19: FG, Independents in talks for the survival of oil sector – Oando COO

By Sebastine Obasi

As coronavirus, otherwise known as Covid-19 takes its toll on global price and production, the Nigerian government is stepping in to ensure that Independents are engaged in conversations on oil production cuts, for the survival of the sector, the Chief Operating Officer, Oando Energy Resources, Ainojie Alex Irune said.

Speaking  on CNN’s ‘First Move’ with Julia Chatterley, Irune stated,  “As Independents, we have very little control over, so if I break down that operating cost for you, there is a 20-40 percent that sits out of our control in terminalling fees, transportation fees for crude, we have very little control over that. As Independents, our human resource, our payroll, operations largely; is where we look to make those cuts and of course the capital side.

To your point, will this be enough? I think the question is the price of oil. We’re seeing an uptick in the price, we are seeing the decision by OPEC to cut 10 million barrels coming to realise the intention of OPEC; they’ve taken that huge step. But more importantly, the Government is stepping in to ensure that Independents like ourselves are engaged in conversations to ensure that process of survival, which is indeed a process for us, unknown as well, is managed jointly, to see that it takes the least amount of time to see a recovery.

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Explaining the challenges posed by Covid-19 as they affect independents, Irune said, “We have made the sacrifices and taken the decisions, but what we have seen is the likes of the National Oil Company (NNPC) leading us as partners, putting in about $40 million and more into that basket.

We’ve seen a larger group of banks and other institutions come in, and for us the key is this- the effective spend and distribution of those funds through the palliative measures we have all set out to push to the most needy and the most vulnerable, because that’s really what this is about.

“Yes, COVID will come and we will deal with those issues, but there will be casualties after we have dealt with the pandemic and a lasting solution – our company for one has taken a step to create an aggregator platform to combine donors and last mile solutions so NGOs and boots on the ground.

“We are encouraging people to come in and donate so we can disperse this money and get it to those that really need it. It’s been an amazing showing by the private sector. Dare I say, they have made the difference.” He also explained that the federal government is bent on accelerating some of the key industry enabling projects such as the Escravos, Ob-Ob and Abuja – Kaduna –Kano  pipeline projects.“The NNPC is focused on getting these to a stage where when all this is over, we are a country that is not only ready to be more efficient when it comes to oil and gas exploration and utilization, also domestic capacity increases and we are able to have more barrels to export,”he added.