W’African oil operators agree on cost reduction measures, policy consistency

Urge Nigeria to entrench transparency in hydrocarbon sector
APPARENTLY irked by the free fall in international crude prices, the oil and gas operators across the West African region are considering various cost-efficient measures, and pushing for favourable government policies that would aid their investments.

The major industry operators, who gathered at the on-going 20th Offshore West African Conference and Exhibition (OWA) in Lagos, yesterday said it was high time for the West African oil producers to look into cost reduction measures, innovations and regulatory policies that would guarantees sustainable investment in the continent.

Speakers at the event, including Managing Director and Chief Executive, Total E&P Nigeria, Nigeria, Nicolas Terraz; Chief Executive Officer, Ghana National Petroleum Corporation, Alexander K. M. Mould; General Manager, Deep Water Operations & Joint Interest Assets, Esso Exploration & Production, Nigeria, Oladotun Isiaka; Director-General, Federal Institute of Food and Industrial Research Oshodi, Gloria Elemo; and the Managing Director PennWell International, Glenus Ensar, among others, believed that the prices may not rebound soon, hence the need for the West African sub-region to take drastic actions for the short-term effects and prepare for the future.

Ensar said: “Guessing the oil price rebounding soon is a max game, with Iran coming online in the market and lack of demand from China, we assume that these relatively low oil price is going to stay for a while, therefore the participants at the OWA conference this year are intellectually looking at the best way forward to survive in the really tough moment.

“Nigeria as an oil producer needs to continue to increase in transparency and make the act of doing business within its territory easy and sustain that process.
“The big word here is cost control, you need to bring down the price at which you continue to produce to maximize profit.”

Also, Chief Executive Officer, Ghana National Petroleum Corporation, Alexander K. M. Mould, said the oil-producing firms should plan for longer period of low oil prices.

He, therefore, tasked the African governments on policy stability and consistency, noting that the long-term of political risk in the continent has largely impacted negatively on businesses.
According to him, the cost of producing from Jubilee is less that $10 per barrel and TEN is about $30 per barrel.