The Nigerian Association of Petroleum Explorationists (NAPE) has blamed Nigeria’s economic recession on the numerous challenges in the upstream sub-sector of the country’s oil and gas industry and called for a reset to what the association described as a “new normal”.
Speaking to journalists at the weekend in Lagos, the President of NAPE, Mr. Nosa Omorodion stated that the challenges that created the economic recession were caused by a number of circumstantial occurrences.
Omorodion identified low global oil price; lower than expected country daily production due to vandalisation of the export facilities, shortfalls in joint venture funding and the anxieties in the upstream business caused by delays in passing the Petroleum Industry Bill (PIB) as the factors responsible for the recession.
According to him, all these factors have directly or indirectly resulted in lower revenues forcing two consecutive negative Gross Domestic Product (GDP) growths and inevitably taken Nigeria into economic recession.
“Before Nigeria officially acknowledged being in a recession, low oil prices had resulted in the slowdowns in projects as well as practical stoppage of exploration activities in by most companies. This was further compounded by curtailment of oil and gas production due to vandalisation of export facilities. The resultant sharp cut -back in projects was aggravated by serious shortfall in joint venture funding with companies instead focusing on very limited short term production-related activities,” Omorodion explained.
The NAPE president also spoke on the association’s 34th Annual International Conference & Exhibition coming up in Lagos from November 13 to 17 with the theme “Nigeria oil & Gas Industry: Tackling Our Realities”.
He argued that the renewed quest and diversification of hydrocarbon resources in sedimentary basins like the Chad Basin and Benue Trough and recent commencement of oil production from Dahomey and Anambra basins are developments that are set to alter the Nigerian oil and gas landscape.
Omorodion stressed that Nigeria currently maintains an economically unstable negative net energy trade balance in which the nation exports virtually all the crude oil produced and imports a substantial part of its refined petroleum products needs.
The country, he said also under-utilises other energy sources such as bitumen, coal, lignite, and shale oil, thereby leading to a monoculture economy that is largely dependent on crude oil export.
The NAPE president further stated that it was against the backdrop of these numerous challenges that the (NAPE)’s 34th Annual International Conference & Exhibition will throw its searchlight on survival strategies for petroleum exploration and exploitation in a challenging environment.
According to him, the conference will also examine the effectiveness in the existing policies to drive growth in the oil and gas industry so as to come up with initiatives for the development of road maps and new policy initiatives.