Role of NNPC in low oil price regime, by stakeholders
THE Society of Petroleum Engineers (SPE) Nigeria Council has emphasised the need for the Nigerian National Petroleum Corporation (NNPC) to respond to low oil price regime through subsidy removal, review of CAPEX spending, focus on profitable subsidiaries, delivery of gas projects and domestic refinery optimisation.
SPE, in a communiqué issued at the end of 2015 edition of the Oloibiri Lecture Series and Energy Forum and signed by its president, Emeka Ene, also identified politics, environment, economic and technology as four major factors affecting crude oil prices.
According to SPE, based on current Nigerian fiscal system, operating cost per barrel of oil must be 33 per cent of the global oil price in order to make the project feasible and get smoother funding approvals from NNPC.
It identified technology as a key driver for reserves determination and production growth which are critical to mitigating oil price spike impact.
SPE added that continuous focus on asset integrity, proper balancing of short and long term projects and avoiding off-load of talented employees will be key to surviving impact of low oil price in the long term.
It stated: “Reduction in contract processing time is necessary to mitigate impact of oil price dynamics. Creating stable and effective Government policies, regulations and processes will reduce impact of oil price dynamics. Developing non-oil industries will help the country improve its revenue generation capacity.
“Major and small capital projects must be done cheaper by improving efficiency, completing on schedule etc.
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