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The Department of Petroleum Resources (DPR), Nigeria’s oil sector regulator, has released what it described as the strategic plan and policy for the survival and success of the industry post Covid-19.
A statement by the organisation stated that the agency’s Director, Mr Sarki Auwalu, spoke during an address at a webinar organised by Future Energy Leaders Nigeria (FEL) entitled: “Nigeria Oil & Gas Sector: Surviving and Thriving Post Covid-19”.
It said that Auwalu underscored four key areas the sector 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 optimisation. 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 rationalisation and asset optimisation. For this, there would be project screening and maturation; and contract renegotiation,” he said.
According to him, the third step to achieving strategic repositioning and business optimisation is a “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,” he said.
Auwalu noted that for surviving and thriving beyond Covid-19, the DPR embarked on marginal field bid round, policy and regulations, business environment and investment drive as well as making 2020 ‘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, including global tourism, travels, hospitality, energy sector and transportation.
He lamented that for instance, on April 20th, 2020, WTI crude oil slumped into negative for the first time, while the United States unemployment rate in April and May 2020 was reported as 14 .7 million and 13 .3 million respectively.
On oil and gas and the Nigerian economy, the DPR director stated that the sector oils the wheels of the Nigerian economy as it contributes approximately 10 per cent of Gross Domestic Product (GDP).
“The sector is also responsible for about 80 per cent 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 to learn to work and live around it,” he said.
According to him, “The global economies gradual easing of lockdown; slow, sustained growth in the economy and changing work environment and work processes are signs that the world will need to work and live around it.”
Auwalu urged businesses in the sector to deploy online resources, work tools and electronic media resources, noting that businesses must swim to remain afloat or simply drown without innovating.
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