How NNPC is coping with falling oil prices
The Nigerian National Petroleum Corporation (NNPC) has disclosed that the drop in crude oil price has taken a toll on its operations, thereby leading to a sharp decline in its production activities.
The Group Executive Director (GED), Engineering and Technical Division, NNPC, Mr. Bayo Ibirogba, made the disclosure during a visit to the fabrication yard of Kaztec Engineering Limited (KEL) on Snake Island, Lagos recently. He explained that the corporation which is faced with the double challenge of declining oil price and drop in production had to seek for value addition in its entire production chain, adding that KEL has proved to be a worthy partner in that regard.
‘‘Kaztec is an existing client of NNPC. They are already doing some works for us and are also prospecting for more. And as you know, we have some great challenges. We have the double challenge of declining crude oil prices and that of production. So for us, we are looking for value addition at every step of our operational chain.
“So when we have indigenous fabricators like this, it is very important that we come around to see what they are doing and actually assess the extent to which they can improve our own business. Just like they are integrated, we are also integrated. We want to produce more oil and convert them to petroleum products to serve the Nigerian populace. And this is our own contribution to the transformation agenda of President Goodluck Jonathan’s administration,’’ he noted.
The NNPC boss said that for local fabrication yards to continue to be engaged, operators in the oil and gas industry will have to increase their activities in the upstream sector. And to achieve this, he said, all hands must be on deck to ensure that the Petroleum Industry Bill (PIB) is passed and subsequently becomes a law.
Ibirogba insisted that the passage of PIB into law would ensure a level playing field for all players, saying that remained what was needed to grow the sector because many don’t need any form of incentive but a level playing field where they can compete in an open and transparent market. ‘‘And I think with that, once the fiscals are clear to everybody, that would attract the much needed investments into the sector.
The GED assured local fabricators that the era of carrying out works abroad is gone, saying the local content law gives a competitive advantage to local fabricators, stating that the corporation was more than ready to patronise local fabricators well before going abroad.
The Snake Island Fabrication Yard in Lagos State is being built by Kaztec Engineering Limited, with Addax Petroleum Development Company as its technical partner. It is the first fully owned indigenous fabrication yard in Nigeria.
The yard, on completion, would be a one-stop-place for fabrication of offshore platforms, large offshore modules, FPSO refurbishment and new build, jackets. It would also provide facilities like pipe mill, pipe coating, dry and floating dock, logistics, supply base and skills development and satisfaction of all the project delivery needs of oil and gas companies doing business in Nigeria, the Gulf of Guinea and West Africa.