Nigeria’s oil sector regulator, Department of Petroleum Resources (DPR) has released strategic plan and policy for the survival and success of the industry post COVID-19.
Director/CEO of the agency, Engr. Sarki Auwalu, who made this known in a Keynote Address at the Webinar organised by Future Energy Leaders Nigeria (FEL) entitled; “Nigeria Oil & Gas Sector: Surviving and Thriving Post COVID –19,” underscored four key areas the country is deploying to stay afloat despite troubles and threats posed by the Coronavirus pandemic to the economy.
“There is no better time for strategic repositioning and business optimization. There are four ways this can be achieved. The first which is cost control and management has to do with realignment of cost of production per barrel as well as corporate, business and financial stewardship
“The second is portfolio rationalization and asset Optimization. For this, there would be project Screening and maturation; and Contract re –negotiation,” he said.
The third step to achieve strategic repositioning and business optimization, according to Auwalu, is “New business and operational resilience, which include vertical Integration model covering the refineries; Operational Excellence; and Compliance.
“The last in that stage is strategic partnership; contracting models; Service Provider Open Access; and shared Risks and returns.”
The agency, he said, has lined up the following Model for surviving and thriving post-COVID-19. These include Marginal field bid round; Policy and Regulations; Business environment and investment drive; and making this year the Year of Gas.
COVID -19, according to the DPR boss, caused a shutdown of markets globally with impact on all key sectors of global economy.
Stating that global tourism, travels, Hospitality and SMEs were affected, Auwalu maintained that the Energy sector was a major hit, as transportation was ground to a halt.
For instance on April 20 th, 2020, he said, WTI crude oil slumped into negative for the first time in falling to negative (minus) $37 .63. The United States (US) unemployment rate in April & May 2020 reported as 14 .7Million &13 .3Million respectively compared to H22019 average of only only3.6million. Worldwide statistics follow similar trend.
On oil and gas and the Nigerian economy, the DPR director stated that the Sector oils the wheels of the Nigerian economy as it contribute approximately 10 % of Gross Domestic Product (GDP).
“The sector is also responsible for about 80 %of Government revenues as it is also the principal source of foreign exchange earnings and Foreign Direct Investments (FDIs).
“There are, expectedly, direct impacts of falling oil prices on the country, which include; change in Budget benchmark as well as the Revised 2020 Budget.
“These have brought about a new normal also known as a new reality which is that COVID-19 may be with us for some time. The world would have must learn to work & live around it.”
He continued; “The global economies gradual easing of lockdown; Slow, sustained growth in the economy and changing work environment &work processes are signs that we will need to work & live around it.
“Others in this category are utilisation of online resources, work tools and electronic media resources, Businesses ‘must swim to remain afloat or simply drown’ and to know that Challenges creates opportunities.”