TotalNews247

Monday, 22 February 2016

Oil Depression: Hard times for marginal field operators

As the slide in oil prices bite harder on stakeholders in the Nigerian Oil and Gas industry, OLUWAGBENGA BANKOLE examines the severe effect of the current situation on marginal field operators in the country.

Introduction
It is no longer news that the Nigerian oil and gas industry is passing through a turbulent period due to the drastic dropped in global oil prices. The oil prices slide from about $110 per barrel few years ago to less than $30 per barrel.

The collapse of crude oil prices in the second half of 2014 caught many by surprise. The price of Brent crude fell more than 50 per cent from $115 per barrel (bbl) in June to below $50/bbl by early January in 2015 and shows no sign of reaching the bottom just yet. For four years up to June 2014 oil prices had remained consistently above the $100/bbl mark

Oil has certainly been tumbling recently. International benchmark Brent crude twice last week set a new near 13-year low of below $28 a barrel, as fears over persistent oversupply reached fever pitch following the news that Iran will return to export markets this month. A slowdown in China that could hit demand is also exacerbating bearish sentiment.

Effect on marginal field operators

In an exclusive interview with our correspondent, the Managing Director of Platform Petroleum one of the Marginal Field Operators in Nigeria Mr. Owieadolor Osariemen said that the price is squishing their company very severely.

He said it has been cost adjustment all the way and they don’t even know where to adjust now, saying that as a matter of fact, balancing their budget for 2016 is a very huge challenge for them at the moment.

“At less than $30 per barrel it is a huge struggle for us. But we are doing everything to see how we keep adjusting our cost because that is what we can do, while also hoping that the oil price is likely to see the last phase of this low regime. Surviving this year is a critical thing for us. Once we survive this year things are likely to go up subsequently,” he disclosed.

While speaking on the cost of producing a barrel of crude oil compare to current price of curde Osariemen said; “the cost of production today is almost the same thing with oil price. It varies from company to company. It depends on your funding source. It is in the range of $20 to $30 per barrel depending on so many factors which include your overheads, volume and capital.”

He also said that Platform Petroleum we have done a little cut of their staff members because of the current situation.

Also speaking with our correspondent, the Chairman/Managing Director of another marginal field operator, Dansaki Petroleum Engr. Adenrele Afolabi said that cost of producing a barrel of oil is higher than the cost of oil per barrel for marginal field operators who are producing on their fields.

He noted that due to the current situation some marginal field operators who are still developing their field are now re-negotiating with their service providers in order to have a lower service cost.

While responding to the mail of our correspondent, the Managing Director of Energia Limited, a joint venture operator of the Ebendo and Obodeti marginal field, Mr. Felix Amieye-Ofori said that dealing with sub $30/bbl crude price is quiet challenging because their revenue has collapsed from $110/bbl to $28/bbl.

He also said that service cost hasn't changed that much, neither has ones bank loan changed, adding that the only way for them is to cut back on operation and they only carry out maintenance activities just to keep afloat.

He however said that this is the time to have more volume to compensate for falling crude oil prices, saying that though they have stopped new drilling, but they are embarking on workover operations to bring in more crude.

Way Forward

Speaking on the way forward for Marginal Field Operators in the country, the MD of Platform Petroleum Osariemen said that Government must begin to look at the fiscal terms with which most of the marginal field operators are operating, adding that the fiscal terms are no longer realistic.

“The present situation requires collaboration from everybody. The government, the Banks, service providers etc. It requires all industry stakeholders collaboration,” he said.

On his on part, the Managing Director of Dansaki Petroleum Engr. Afolabi said government should look at how they can assist marginal field operators not necessarily in terms of giving money, but in terms of tax measures, bund.

The Managing Director of Energia Limited told our correspondent that the way forward is prudence and operational efficiency, adding that marginal field operators also have to pay closer attention to HSE and Community Relations as both or either of them can trigger unplanned expenditures.

According to him; “there is also need for more collaboration amongst operators; to share resources, facilities and contracts. The other strategy is to renegotiate all existing contracts with service providers and also discuss with banks for better payment terms on existing loans.”

He added that as marginal fields, government must also begin to look at some incentives for the operators if we are to stay afloat.

‘I stole my boss’ car to attend Valentine’s Day party’

John with his boss car

Rapid Response Squad (RRS) operatives have arrested a driver, Emmanuel John, for allegedly duplicating his boss’ car key and attempting to abscond with it.

John, 26, was arrested at Abraham Adesanya Estate in Lekki last Sunday night for alleged attempted theft of the Toyota Corolla car marked EPE 642 DX, which he planned to take to a Valentine’s Day party at Splash Hotel in Sangotedo, Ajah.

John had a week before his plan, cut the Toyota Corolla key without the knowledge of his boss, Mrs Flora Ighalo.

On Sunday afternoon when he was not supposed to be at work, he allegedly sneaked into the Abraham Adesanya Estate residence of his boss, and took away the car with the cut key.

RRS quoted John as saying: “I and my friend, Oscar, want to carry the Toyota Corolla to Splash Hotel’s Valentine Show on Sunday night. I persuaded Madam to give me the go-ahead to cut a spare key but she declined. A week before February 14, I duplicated the key without her knowledge in Obalende.

“Even though, she excuses me from work on Sundays, I sneaked into her residence and took away the car after church. I took the car to my residence in Ajuwe Area, Ajah, Lagos.

“My plan was that, after the Valentine show, it’s going to be stressful for me to leave the show around 3am, go home and freshen up and set out for Abraham Adesanya Estate around 4am for the day’s work, but with the car, it’s going to be easy for me to make it to work.

“After driving the car round Ajah, I was on my way home around 8pm when I saw Madam calling my set. She asked me where I was and I told her and she said I should come to her house that I was going to take her somewhere. I turned the car and I headed towards Abraham Adesanya Estate.

“I was at Abraham Adesanya Estate Roundabout trying to enter the estate, when a man double crossed me and RRS officials arrested me. They asked me where I took the car to since morning and I explained everything to them.

“Madam has been very nice to me. She pays me N35,000 monthly. I am almost like her family member. I am always at ease with her and her family

Mrs Ighalo, a tax consultant, said: “At about 8:20pm, I was seeing off my in-law and to my surprise, I discovered that my car, Toyota saloon, EPE 642 DX, has been removed from the park.

“I immediately called few friends and one of them, got in touch with the operatives of RRS but it never occurred to me that my driver could take a vehicle I just brought from the church, with its key in my hand without my notice. Besides, he was not supposed to come to work on Sunday.

“Could he have come to my house without my consent and taken away my car? The car has only one key. Where could he have gotten another key?

“I called him to ask him where he is and he told me that he was at home. I told him to come and pick me to somewhere, he said okay. He came and we saw the car with him.”

Police spokesperson Dolapo Badmos, a Superintendent of Police (SP), said the suspect has been transferred to the Special Anti-Robbery Squad (SARS).

“It is important to determine if the suspect acted alone or he has an accomplice”, she said.

CAN election: Tension mounts over alleged plan by FG to install Northern President

CAN President, Ayo Oritsejafor

Oritsejafor This appeared to be a repeat of what transpired during the administration of ex-President Olusegun Obasanjo. Already, APC, is said to be interested in sponsoring a pro-Buhari clergy from the North to avoid any radical opposition to his administration from the Christian community.

A group of Christians under the umbrella of Christ Redeemers Union, yesterday, claimed that the Presidency was interested in CAN election for some selfish reasons. But the Presidency debunked the allegation, saying Buhari did not interfere in an internal affairs of any organisation. Reacting, the Special Adviser to the President (Media and Communications), Mr. Femi Adesina, dismissed the allegation, saying Buhari does not interfere in the internal affairs of any organisation.

He said: “It means that some Nigerians don’t know their President; Your President, Muhammadu Buhari did not interfere in things like that; so they need to know the person who is their President.” The National Director of CRU, Dr. Ebenezer Olusola Abednego, who disclosed this to newsmen, in Abuja, said that Christians would resist any plan by the Presidency to instal its in CAN Presidency. Olusola explained that the APC government was desperate to ensure the emergence of its candidate in CAN who will lead the Nigerian Christians community.

“We have it on good authority that any leader being installed by the Presidency in CAN would avoid any virulent criticism of the Buhari government and this has informed their desperate to install a leadership that will not be critical. “But we are vehemently opposed to government meddling into a purely religious affairs and should the Presidency succeed in installing an APC/Buhari stooge in CAN, we will pull out of CAN.We are ready for them, we have it on good authority that some Muslim leaders from the North are behind the plot. But by the power in the name of our Lord, Jesus Christ, every knee shall bow and they won’t succeed.”

Reacting to this, the Special Adviser to the President (Media and Communications), Mr. Femi Adesina, dismissed the allegation, saying Buhari does not interfere in the internal affairs of any organisation. He said: “It means that some Nigerians don’t know their President; Your President, Muhammadu Buhari does not interfere in things like that; so they need to know the person who is their President. “The people making the allegation can’t insist that they are correct because that is the man for you and Buhari doesn’t interfere in anything. If he doesn’t interfere in State elections where his own party, APC is having candidates, how will he interfere in CAN elections? They don’t know their President.”

CAN election: Tension mounts over alleged plan by FG to install Northern President

CAN President, Ayo Oritsejafor

Ahead of the expiration of the tenure of the President of Christian Association of Nigeria, CAN, Pastor Ayo Oritsejafor in July, tension is already mounting within the Christian community following alleged plans by President Muhammadu Buhari and All Progressives Congress, APC, to install a Northern successor. OritsejaforOritsejafor This appeared to be a repeat of what transpired during the administration of ex-President Olusegun Obasanjo. Already, APC, is said to be interested in sponsoring a pro-Buhari clergy from the North to avoid any radical opposition to his administration from the Christian community. A group of Christians under the umbrella of Christ Redeemers Union, yesterday, claimed that the Presidency was interested in CAN election for some selfish reasons. But the Presidency debunked the allegation, saying Buhari did not interfere in an internal affairs of any organisation. Reacting, the Special Adviser to the President (Media and Communications), Mr. Femi Adesina, dismissed the allegation, saying Buhari does not interfere in the internal affairs of any organisation. He said: “It means that some Nigerians don’t know their President; Your President, Muhammadu Buhari did not interfere in things like that; so they need to know the person who is their President.” The National Director of CRU, Dr. Ebenezer Olusola Abednego, who disclosed this to newsmen, in Abuja, said that Christians would resist any plan by the Presidency to instal its in CAN Presidency. Olusola explained that the APC government was desperate to ensure the emergence of its candidate in CAN who will lead the Nigerian Christians community. “We have it on good authority that any leader being installed by the Presidency in CAN would avoid any virulent criticism of the Buhari government and this has informed their desperate to install a leadership that will not be critical. “But we are vehemently opposed to government meddling into a purely religious affairs and should the Presidency succeed in installing an APC/Buhari stooge in CAN, we will pull out of CAN. We are ready for them, we have it on good authority that some Muslim leaders from the North are behind the plot. But by the power in the name of our Lord, Jesus Christ, every knee shall bow and they won’t succeed.” Reacting to this, the Special Adviser to the President (Media and Communications), Mr. Femi Adesina, dismissed the allegation, saying Buhari does not interfere in the internal affairs of any organisation. He said: “It means that some Nigerians don’t know their President; Your President, Muhammadu Buhari does not interfere in things like that; so they need to know the person who is their President. “The people making the allegation can’t insist that they are correct because that is the man for you and Buhari doesn’t interfere in anything. If he doesn’t interfere in State elections where his own party, APC is having candidates, how will he interfere in CAN elections? They don’t know their President.”

OritsejaforOritsejafor This appeared to be a repeat of what transpired during the administration of ex-President Olusegun Obasanjo. Already, APC, is said to be interested in sponsoring a pro-Buhari clergy from the North to avoid any radical opposition to his administration from the Christian community.