For operators in Nigeria’s oil industry to survive in the post-COVID-19 environment, they need to embrace new normal and seek ways to embrace cost optimisation and operational resilience.
Despite hopes of achieving higher prices, oil prices continued to remain unstable, trading below the $40 region, after a few days of the rally.
DPR’s Director, Sarki Auwalu, disclosed some of the plans while speaking during a webinar, entitled: ‘Nigeria Oil & Gas Sector: Surviving and Thriving Post COVID-19.’
The DPR boss said: “There is no better time for strategic repositioning and business optimisation. There are four ways this can be achieved.
“The first, which is cost control and management has to do with the realignment of cost of production per barrel as well as corporate, business and financial stewardship.”
Auwalu said the second was portfolio rationalisation and asset optimisation, adding that for this, there would be project screening and maturation as well as contract renegotiation.
He said the next step would entail new business and operational resilience, which include vertical integration model covering the refineries, operational excellence and compliance.
The regulator also confirmed that the country would end its bid round in August, insisting that the licensing round was necessary to address prevailing challenges in the oil market.
Auwalu said while COVID-19 has become the new normal, it demands improved working environment and processes, as well as the need for business reposition.
He stated that cost control and management were key as well as business efficiency, financial stewardship, better negotiation of the contract, improved corporate governance, vertical integration model, improvement in refineries, operational excellence, compliance, asset optimization and others.
Auwalu believes the government has a critical role to play, especially in policy and regulation, business environment and investment drive as well as creating an opportunity for lower cost of production.
“The last in that stage is a strategic partnership, contracting models, service provider open access and shared risks and returns,” Auwalu stated.
He further noted that the DPR embarked on marginal field bid round, policy and regulation, business environment and investment drive, among others, to ensure that the sector was beneficially sustained post-COVID-19 pandemic.