Falling Oil Prices: Africans Must Manage Assets Now-Proust

The effect of the dwindling oil prices has compelled so many nations, business establishments and firms to seek for alternative means of managing their assets.

Speaking at an event in Lagos, the Managing Director and Chief Executive Officer of the upstream companies of Total, Nigeria Mrs. Elizabeth Proust said that Africans must manage their assets now to be able to stay afloat in these terrible times.

According to her “With lowered demand and plummeting oil prices, it is not only major projects, but all projects and the way we work that must be managed in the new reality of the drastic fall of oil prices, we must not only fine tune our technological competencies, we must also examine cost optimization initiatives”.

She further stated that “the first requirement for managing major projects is the reduction of variables in the investment environment. To effectively compete for global investment needed to grow production and revenue. The oil and gas industry requires an enabling environment with adequate funding, efficient institutions and processes and contract stability. Where these conditions are present, cyclical events such as rising and falling oil prices can be better managed.”

She said that any petroleum law should seek to “encourage investment, grow production” and should be a robust investment vehicle that works both in good times and not so good times.”

Meanwhile she added that Total Nigeria has completed a section of its Northern Option pipeline from Obigbo to the Imo River that is now ready for gas inflow to the National Integrated Plant at Alaoji in Abia State and will serve industrial plants in this region.

In another development, the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC) Dr. Joseph Dahwa has said that the cause of the slide in oil prices is a combination of “lower than expected demand growth mostly due to lower growth in China and a net increase in product demand in Europe, a continued strong supply growth particularly in onshore America and Iraq and a loss of discipline by Organisation of Petroleum Exporting Countries (OPEC)”

He continued that as a result of falling oil prices, many companies now have stretched cash flow statements and will have to reduce capital expenditure to maintain healthy balance sheets, a development he said will result in the delays in the development of economically attractive projects.

This development he continued will lead to delays or outright cancellation of a number of deep water projects, “one in Angola, three in Nigeria  and one in Ghana, and some shallow water projects about two in Angola , one in Nigeria and two in Ghana”.