How Crashing Oil Price Brought Nigeria’s Independent Oil Producers To Their Knees

Yemisi Izuora
Austin-Avuru
The Managing Director of Seplat Petroleum Development Company Plc, Austin Avuru has given graphic explanation of how current oil price slide  impacted negatively on Nigeria’s independent oil companies.

Avuru said Nigeria’s independent producers were worst hit by the drop in price of oil globally.

Avuru who spoke at the 13th Aret Adams Annual Lecture Series in Lagos with the theme: “Low oil prices: Challenges and opportunities” said all independent oil companies were heavily leveraged, adding, “We all borrowed to fund acquisition and growth.

Many are now cash negative and yet need more investments for production increase to survive.”

Avuru said that average of $60 per barrel was required for most companies to survive in 2016.

According to him, We need to embrace effective domestic utilisation of fossil fuels to survive.

The managing director said due to Nigeria’s heavy dependence on oil to balance the economy, the drop in world oil price was a huge blow to the country’s major revenue.

Also, Clay Neff, the Managing Director of Chevron Nigeria Limited, said Nigeria had the opportunity to improve its competitive position in the global oil and gas industry.

Neff said in the current situation, Nigeria should restore investor confidence by providing competition in oil market.

He said the country should ensure security of life and property and control stability and simplify approval processes.

The managing director said the country should solve JV funding challenges and payback arrears, adding that Nigeria had an attractive resource base.

Earlier, the Chairman of the occasion, Malam Muhammed Hayatu-Deen, the Chairman of Alpine Investment Limited, said discovery of oil had a global impact in the world economy.

Hayatu-Deen said while some used it to reverse their economy, others wasted it.

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