…Experts harp on passage of PIB, othersHowever,, who moved from one location to another, investigating the operations of oil firms, reviewed industry data, especially the reports of the Organisation of Petroleum Exporting Countries, OPEC, here reports that the reserves have dropped to 36.89 billion barrels because of low investment and other factors.
When compared to the corresponding period of 2019 the rig count recorded a marginal improvement of about 7.1 per cent against the 85 recorded in H1’19. The OPEC report did not state the major cause of the downward trend, but energy experts told Energy Vanguard that the low investment was fuelled by a combination of factors, including the spread of the Coronavirus, COVID-19, pandemic in Nigeria, scaled down of operations by oil companies and low demand for and prices of crude oil in the international market.
“This is as most FIDs have been on hold to ensure the direction of the industry. With the impact of COVID-19 on the industry, there is additional caution in CAPEX injection as, according to World Oil Report in July 2020, we should expect CAPEX to decline 22 per cent, with all international regions contracting by double digits.
“This, notwithstanding, in terms of dollar rate, the industry would require between $10-20 billion annually to shore up its reserves and production capacity to near the three million bpd, and all of these investments will depend on the regulatory and fiscal environment.”Amieyeofori stated: “There are major factors that are posing existential threat. First, the delay in the passage of the PIB has not attracted investment confidence, thus, affecting the inflow of FDI, into the sector.
‘‘This is the way forward and Nigeria cannot shy away from this reality, if it must sustain its oil and gas business. It has to also go digital and operate most of the facilities remotely.”Continuing, he said: “It is severe as most of the truck lines are still recording between 10-30 per cent crude oil theft, in addition to frequent power outages that cause production disruptions.
The Director General, Lagos Chamber of Commerce and Industry, LCCI, Dr. Muda Yusuf, said: “Oil price is down; cost of production in Nigeria is one of the highest globally, and there are several policy, regulatory and security issues in the sector.