At a time when the global energy industry is still grappling with the daunting challenges of upsetting oil glut and attendant falling oil prices with their disruptive effects on affected economies, the annual Offshore Technology Conference (OTC 2016) held in Houston, Texas, USA offered a veritable opportunity to world oil industry stakeholders to gather, deliberate and articulate ideas on relevant developments, trends and challenges. The Conference is an annual gathering of people from around the world with interest in Oil and Gas, including policy makers, operators, professionals, manufacturers, business executives, entrepreneurs and visitors, who all leverage on gaining technical knowledge and making valuable contacts..
Indeed, the OTC 2016 proved to be a critical opportunity Nigeria could not have missed considering the volatility of our current energy situation amidst the global energy depression. And so, the Petroleum Technology Association of Nigeria (PETAN) led the way to OTC 2016 to put Nigeria in the global energy limelight. In doing this, PETAN consolidated on annual achievements recorded by the association in driving partnership of indigenous Oil and Gas companies with their international counterparts..
It is noteworthy that more than 68,000 attendees and 2,600 companies/exhibitors from around the world gathered at the annual conference, placing 2016’s OTC among the top 15 highest attended in the 48-year history. Also, more than 85 PETAN companies and 2,000 Nigerians attended the highly successful conference. As it has always been since 1969 inception of OTC, attendees got crucial exposure to new technologies and global developments in the energy industry. In a “Volatile” Oil Price World” Nigeria offers assets that can produce at UTC < $20/barrel, Credible integrated Gas Value Chains offerings can be developed, high Domestic demand that can pay +$2.5/MSc and LNG Expansion platforms. Access to MATERIAL 2P + 2C RESERVES with RESOURCE UPSIDE. Nigeria offers assets where the “BELOW GROUND RISK” comparatively low.
PETAN’S ACHIEVEMENTS AT OTC 2016
On its part, PETAN indeed did Nigeria proud at OTC 2016 by pushing our national energy challenges and opportunities to the global front burner of seasoned discussions, expert analyses and investment leverages.
We organized an Investors Dinner as a platform to engage with global stakeholders on the new strategies and changes going on within the NNPC and its impact on foreign investment into Nigeria, among other investment-driven objectives.
PETAN also held a Panel Session with the theme “The Nigerian Oil & Gas Industry: Current Realities, Exciting Opportunities”. Indeed, our current realities include depleting Crude Production and Reserve, security challenges becoming more complex, high and increasing unit cost of production, funding challenges, inability to meet cash call obligations, huge budget deficit, low industry activity, uncertainty of fiscal framework.
Local Content Workshop
PETAN organized a Local Content Workshop with the theme “Local Content Implementation in the Nigerian Oil and Gas Industry: A Cost Reduction Strategy”.
PETAN Companies Exhibition
Short Courses on New Technology
1. There is need to create good image for our country and demonstrate that Nigeria is good for business through institutional transparency, well-articulated policy consistency, building of enabling infrastructure and improvement of operating environment security, in order to attract more foreign investors to take advantage of opportunities abounding in the Nigerian Oil and Gas industry.
2. We must restructure our Oil and Gas industry operations by simplifying access to assets, maintaining sanctity of contracts, instilling corporate governance in all our dealings and reducing overall project costs for cost-effectiveness.
3. There is an imperative to encourage creativity and opportunity for partnership among Nigerian Companies in order to scale up to big projects in the face of current complex industry challenges.
4. Government must reduce Contracting Cycle from 3-5 years to 6 months.
5. Industry to partner with Government to sort out the above ground risks in the Nigerian Oil and Gas industry. Investment Friendly & Competitive Operating Model is needed as a matter of urgency now.
6. PETAN would partner with NNPC to grant seal of Competence and Quality to Oil industry service companies – to certify service companies and create Service Champions in each service category. This will help to grow capacities in the country that can be used in any part of the world.
7. NCDMB should take steps to help Nigerian Companies survive the current industry downturn and oil price collapse so that they will be around when the industry cycle turns around.
8. Cabotage Laws should support Nigerian Content more. It should be further providing the enabling environment for growth in Nigerian participation in maritime and ownership of vessels. A special goal is to have Nigerian owned vessels transport Nigerian crude, which is not happening presently.
9. Government, regulators and stakeholders must remain focused on the goals of the Nigerian Content Law. Progress has been achieved, but more work needs to be done. Leverage Nigerian Content in Oil and Gas has to go beyond oil.
10. We should build strong and experienced Nigerian companies to help drive down the cost of services deliveries. Nigerian Companies should be supported so they can scale up to big projects. Scale up economics on Big projects through local content collaboration and consortia (Korean model)
11. Collaboration between government/policy makers and private sectors will further entrench the gains of the Act.
12. Funding is a major impediment to the growth of Nigerian Content. The NCD Fund MUST be applied as intended to support Nigerian service providers and to help them scale up to bigger projects. Policy makers should remove the blockage that prevents access to the funds by PETAN companies and others. Finance long term capacity with the NCF (Banks are not funding the industry)
13. Operate a new PETAN PARTNERSHIP SERVICE MODEL. (Contractor financing)
14. NNPC/IOC/NOC’s to Partner with PETAN to create a system of managing Talent for the future. Experience alone will not only lead us to 2020, rather a blend of experience plus new talent.
15. To aggressively grow our reserves with a smart funding model for exploration and development activities. Nothing has been added to our reserves in the last ten years.
16. Adopt the NLNG and Seplat model in security of assets.
CONCLUSION Now, OTC 2016 has come and gone but we at PETAN remain committed to the development and growth of the Nigerian Oil and Gas industry, and by extension the Nigerian economy. Just as Americans developed America to its economic greatness today, it is Nigerians that will develop Nigeria and that is what PETAN stands for.
Whenever there is turbulence of militancy in the Niger Delta, the multinationals and foreign investors may run away. It is we Nigerians, especially PETAN members, who risk our lives to sustain production and the Nigerian economy. In the current challenging energy price environment, we are willing to make necessary sacrifices to sustain the industry towards a viable, stable, prosperous future for all.Signed:
Bank Anthony Okoroafor
Chairman, PETAN, Nigeria