Crude Oil Price Decline Threatens Deepwater Projects – GMD

Dr. Joseph Dawha, Group Managing Director, Nigerian National Petroleum Corporation (NNPC), has said that the ongoing decline in crude oil price will delay the exploration of three national deep water projects.

Dawha made the revelation at the ongoing seminar by the Offshore West African Conference in Lagos with the theme ‘Managing West Africa’s Major Projects’.

Dawha represented by Mr Jonathan Okehs, Group General Manager, National Petroleum Investment Management Services (NAPIMS), said that the theme was chosen to address the decline in oil projects in West African countries and seek solutions.

According to him, many companies have cash flow challenges due to crude oil price decline that affected their capital expenditure.

“To many healthy companies balance sheet, these will result in delay of economically viable projects.

“Delay in major projects will now be featuring in many companies projects and progammes, especially for offshore projects, as companies try to balance cash flow for projects,’’ he said.

Dawha said that a number of deep water projects will suffer delays or outright cancellation including one in Angola, three in Nigeria and one in Ghana.

“While in shallow water, two projects in Angola, one in Nigeria and two in Ghana may also suffer delays,” he said.

According to him, the challenges of the Nigerian oil industry revolve around managing major projects through both price and physical uncertainty.

“As in the past, in 1986, 1998 and 2008, Nigeria has always responded in many ways through right balance of incentives, as this industry is important to the overall economy of our country,’’ Dawha said.

Also speaking, Mr Ernest Nwapa, Executive Secretary of the Nigerian Content Development and Monitoring Board, urged operators to keep Nigerian Content alive.

Nwapa charged Nigerian oil industry operators to focus on the survival of their projects and the economy of oil producing countries.

“I was surprised in the last three months when investors and operators were talking about the threat of falling crude oil prices and issues around shale gas,” he said.

He also urged operators not to panic over the decline in the crude oil price, but pay more attention on how to maximize profits.

Mr George Oguachuba, Offshore West Africa 2015 Advisory Board Chairman, said that the oil and gas landscape in Africa was rapidly changing, as demonstrated by the many emerging oil and gas nations.