Akinwunmi: Oil Sector Won’t Get Tired of Asking for PIB Passage

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Olatunji Akinwunmi is the Chairman, Society of Petroleum Engineers’ Nigerian Council. In this interview with Chineme Okafor, he talks about the forthcoming 2021 edition of the annual Oloibiri Lecture Series and Energy Forum as well as the commitment of operators to reforms in the oil sector, amongst other issues. Excerpts.

How does it feel to have the Oloibiri Lecture Series and Energy Forum (OLEF) back after COVID-19 pandemic forced its suspension in 2020?

It is true that last year the OLEF was cancelled at the last minute due to the escalation of the pandemic. We had planned a physical event to hold mid-March 2020, but the developments at that time forced us to cancel. As you know, many other events scheduled at that time were also cancelled. I am very happy that we are now able to hold the OLEF albeit in a hybrid format, due to the requirements of the COVID-19 protocols, especially with respect to large gatherings. Accordingly, we will welcome few people at the site while most delegates and participants will have to join online.

Why is your choice of theme this year centered on excellence and optimisation?

Since last year we have been confronted with the situation of pandemic which also led to lockdowns in several countries and resultant downturn in commercial and industrial activities leading to an unprecedented drop in demand for our commodities. At the beginning of this year, we also witnessed the consummation of the biggest asset transfer for several years in Nigeria; I am talking about the transfer of OML 17 assets to Trans Niger Oil and Gas Company. So, we thought about operational excellence in the current context giving us the ability to be low-cost producers and we also thought about portfolio optimisation in the sense of assets divestment and transfer of mature assets from the established players to newcomers. We believe that the exchanges that would be facilitated during our upcoming OLEF workshop would be beneficial to the industry in Nigeria.

So, between technology and human resources, which plays a greater role in operational excellence and portfolio optimisation in this industry?

I believe that at the foundation of every progress in any sphere of life is the human being – his courage, and his hunger for continuous progress. Our resilience, our capacity for adaptation and innovation are all what combine to enable progress, therefore any and every technological advancement is a product of man’s (or woman’s) ingenuity.

The COVID-19 pandemic touched on every sector, how peculiar was its impact on this sector?

No one imagined at the beginning of last year that we could have had a lockdown of the major economies of the world. When movements are curtailed – limitation of flights, maritime activity and even passenger vehicular movements, led to low demand of our products and of course the impact is depressed commodity prices which in turn led to an output cut. So, the impact on the oil and gas industry was and continues to be a major one.

Given these challenges, should the industry prioritise existing assets or greenfield projects?

I believe the focus should be on efficiency, the industry should strive to be efficient both in terms of cost and by way of reduction of emissions in all our activities, exploring for new oil and gas fields, as well as developing and producing both existing and new fields. Having said this, the industry in Nigeria is in dire need of new projects which hopefully the passage of the PIB (Petroleum Industry Bill) should enable.

The troubles of the industry here, do you think it could force players to exit soon?

I certainly hope not, this is one of the reasons why the SPE puts a lot of attention and focus on helping to make our industry stronger by technical inputs and facilitating exchange of ideas for best practices in order to ensure the survival of our industry.

What can government do to help the industry in the midst of these challenges?

I think one clear and obvious message that the industry cannot be tired of passing at this time is to encourage the federal government to pass a PIB that would enable growth of the petroleum industry in Nigeria while taking into account the global realities of the energy transition.

Do you still see a future for fossil fuels?

Oh certainly! There is a future for fossil fuels. With the abundance of the resources we have in Nigeria, there is very good opportunity with the right enabling policies, for us to be able to efficiently develop and produce low-cost high-quality crude oil. As for gas which is a transition fuel, we have a wonderful opportunity to develop and produce this abundant energy resource in our country.

But how is SPE bracing up for a future without vibrant fossil fuel economy?

As I said earlier, fossil fuels still have a future in contributing to the energy mix of an ever-increasing demand, Nigeria as a gas province still has much to offer. And if we can reduce our cost of oil production and improve overall efficiency, the industry still has many years of active operation ahead of it.

What would be your overall assessment of Nigeria’s over 60 years of oil history?

Without a doubt, it has been a checkered history, but the future is indeed bright if we take advantage of digital transformation, efficiency of our operations and relentless pursuit of cost optimisation across our industry.