Weakening Oil Price Will Lead To Project Termination In Nigeria- NNPC

Yemisi Izuora

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Joseph Dawha, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) has said that the ongoing decline in crude oil price will weaken operations in Nigeria’s oil and gas sector and will particularly cause interruption of about three deep water projects in the country.

 

Dawha who expressed the apprehension at the Offshore West African Conference in Lagos which is themed “ Managing West African’s Major Projects’, said that this year theme was carefully chosen to address decline in oil projects affecting West African countries and ways to profile better solution.

 

Dawha who was represented by Mr Jonathan Okehs, Group General Manager, National Petroleum Investment Management Services (NAPIMS), stated that many companies had serious cash flow challenges due oil price decline which has to reduce their capital expenditure.

 

He further noted that many healthy companies balance sheet will result in delay of economic viable projects and such scenario will now be featuring in many companies project and progammes, especially for offshore project as companies try to balance cash flow project.

 

Dawha said that a number of deep water projects will suffer delays or outright cancelation including one in Angola, three in Nigeria and one in Ghana.

 

According to him, In Nigeria the challenge for industry is how to manage major projects through both price and physical uncertainty

 

‘As in the past, in 1986, 1998 and 2008 Nigeria has always responded in many projects and right balance of incentive, as this industry is important in the overall industry of our country,’’ Dawha added.

 

Speaking also Mr Ernest Nwapa, Executive Secretary of the Nigerian Content Development and Monitoring Board, urged operators to keep Nigerian Content alive.

 

Nwapa however lauded the conference theme, adding that the topic is essential to the oil sector, adding that all the segments of the industry should continue to focus on the survival of the projects and economist of oil producing countries.

 

He urged operators not panic over the decline in the oil price, saying ‘I don’t think we should panic but to pay more attention about what to do to record the benefit that our business will bring to its operation.

 

Mr George Oguachuba, Offshore West Africa 2015 Advisory Board Chairman said that the oil and gas landscape in Africa is changing rapidly, as demonstrated by the many emerging oil and gas nations.

 

Oguachuba said that the Offshore West Africa provides the technical forum for the sharing of experiences and discussions of the challenges and advancements of oil and gas exploration and production activities in the West African sub-region.

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