Nigerian Content Development Will Mitigate Low Oil Price Regime – Expert
Excellent government initiatives and directives for Nigerian content development, amongst others, would help the country take advantage of the current low price regime in international oil trade, according to the Managing Director of Narag Energy Solutions Limited, Mr. Cyril Nwoye.
Mr. Nwoye, who was the Guest Speaker at the Town and Gown seminar of the Department of Petroleum Engineering, Covenant University, held on Wednesday, March 21, 2018, highlighted other advantages derivable from the current situation as practical need for integrated approach to asset optimisation; strong demand for personnel excellence in engineering and economics; identified gaps and tools for human development required; partnership funding for research topics affecting industry; and great opportunities for Nigerians with efficiency and ability for domain integration.
Delivering a lecture titled, ‘Riding the Storm of Lower Oil Price: Technology, Capability and Research’, the energy expert with 20 years of oil and gas exploration, development and production experience, attributed the volatility in global oil pricing mainly to instability in production and armed conflicts particularly in the Middle East region, which is the hub of oil production. He said that, for instance, in 1931, prices hit record low as the onset of the Great Depression reduced demand; in 1980, exports from the Middle East was at an all-time low due to the war between Iran and Iraq; and in 2011, the Arab spring, which sparked off the Libyan civil war, disrupted oil output.
Mr. Nwoye, while explaining the economic impact of change in the price of oil, said that high oil price is good for Nigerian economy and oil companies, just as low oil and gas prices results from and are related to many economic factors such as glut in supply, emergence of cartels, and speculations. Conventional oil supply, he added, is more immune to change in exploration and production investments.
On the effects of lower oil commodity price, the guest speaker said that there would be lower government spending, reduced investment, investors and executives switch to rigorous oil and gas assets and portfolio optimization, and there would be more focus on asset performance metrics and demand for efficiency and predictability.
Speaking on how his organization, Narag Energy Solutions Limited, had handled the recent low oil price, Mr. Nwoye stated that there was strong integration of economics, Information Technology (IT), and engineering services, and the company increased its technical and management personnel training and competency by 100%. Also, in his words, “We capitalised on local training, promoted multi-domain technically competent project teams, increased consultative sales techniques, supported clients and showed understanding of cash flow and delayed payments, and we did not lose any personnel unintentionally”.
Present at the seminar were faculty, staff, and students of the Department of Petroleum Engineering, including the Head of Department, Professor David Orodu and the immediate past HOD, Dr. Paul Anawe.