Why Nigeria’s Upstream Sector Has Remained Uncompetitive -Stakeholders

Experts in the Upstream sector of the Oil and Gas industry, on Tuesday said that the sector has remained uncompetitive due to huge gaps that require major transformation to address.

Stakeholders who spoke at a webinar with the theme; “The future of upstream in Nigeria-post COVID-19”, said that the Upstream sector, like other sectors in Nigeria has been negatively impacted by the COVID-19 pandemic.

They stated that the future of oil price does not look very bright in the short term.

The Chief Executive Officer, Energy Axis, Funke Taylor, noted that while some countries are able to produce oil at low prices, upstream businesses in Nigeria have not been able to produce at that level, adding that companies in the upstream need to find ways to compete effectively at lower prices.

She said “More than ever, there is need to know how Nigeria’s upstream sector would thrive despite the challenges.

“One of the critical things for companies is to be able to attract the needed investments.”

Taylor explained that there is need for companies to expand their businesses to cover the entire value chain of the oil and gas industry as well as increase in-country capacity for refining products in the upstream sector.

She also said business optimization, outsourcing and strategic partnership, cost control among others are critical for growth and recovery in the sector.

Executive Director, Seplat Petroleum, Effy Okon, said that there is need for effective policies to make the upstream sector competitive.

Ok said, “Nigeria Upstream sector is not competitive, the huge gap to potential requires major transformation.

“Seplat is committed to supporting the government aspirations to transform the economy underpinned by a robust domestic gas strategy.

“Digital transformation will be the core of competitive advantage in the upstream, it will accelerate value creation and optimise subsurface knowledge.”

The Managing Director, Integrated Data Service Limited, Ferdinard Bariwei in his address said that the COVID-19 pandemic had led to a decline in oil and gas consumption and demand in the global market.

He noted that investment in exploration may not fully recover in a short time until international crude oil prices return to a reasonable level.

Bariwei stressed on the need to address perennial issues associated with operational inefficiencies.

“There is need for us to adopt new technologies and processes to enhance productivity, reduce waste and improve system efficiency in the sector.

“Upstream oil and gas industry has potential to unlock $580bn‐$600bn through digitalization.”

According to the MD, the upstream sector need to survive the critical times through creative thinking and maintaining a lower cost curve.