Chairman, Society of Petroleum Engineers, SPE, Nigeria Council, Mr. Emeka Ene yesterday advised the government on the need to invest in Nigeria’s oil and gas industry so as to be competitive and stand firm in times of global oil price crash.
Ene said that since the supply and demand in the oil industry has not change, Nigeria could increase oil production by up to 20-30 per cent, adding that common business sense requires investing in period of low price and selling in period of high price.
He said that it was natural that oil price fell at certain periods and rise again with time, saying that what made other oil producing countries thick was because they invested heavily in their oil industry in periods of slump and reap heavily when oil price rose, that was the best time to invest.
Commenting on what Nigeria should do in a period of low price as being experienced now, Ene said that supply exceeds demand, stating that if one looked at the forecast by the Energy Information Administration, EIA, one expected that by 2016, the gap would start to narrow.
“So this is a time for Nigeria to actually do the opposite of what it is doing, which is to invest. If the country doesn’t invest, when demand will exceed supply, we will not have the barrels to meet that demand. Common business sense tells us that we buy low and sell high. This is the time to invest in our industry.
“As we speak, Kuwait is investing $34 billion over the next three years in its oil industry to improve production; United Arab Emirates (UAE) is doing $36 billion, Saudi Arabia is also doing the same thing but in Nigeria, we are cutting back on our investments by over 30-40 per cent. To counter the effect from further oil glut, Nigeria is to take action by investing in its oil industry to boost production and become a competitive market place.”
He said that diversification of our economy was good but cannot be achieved immediately, instead investing in the industry would be more profitable.
“Diversifying the economy requires coordinated efforts to achieve. Right now, we are facing challenges of restructuring and reforming the industry to be leaner, more efficient and to produce cheaper barrels at a time when the industry is low so that we position the industry to reap the benefits when the industry is high.
“We need to look at brown fields, marginal fields and independents. All the brown fields, wells, that have been developed already, we need to do infield drilling, work-over, and we get cheap barrels.
“Through this, we can increase our production by 20-30 per cent just by investing in that. That is what we need to know as a country, there is need for campaign to boost production. Short term oil gain should be the target” he said.

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