Local Oil Firms Need Respite To Contain Production Cuts – Seplat Boss

The new chief executive officer of Seplat Petroleum Development Company Plc, Mr Roger Brown, has said that local oil companies deserve special support from the federal government if oil production restriction, which requires reducing their output is prolonged.

In order to mitigate the adverse impact of COVID-19 on global oil demand, the Organisation of Petroleum Exporting Countries (OPEC) and its allies agreed last July to lower their current crude oil production ceiling to 7.7 million barrels per day (bpd) starting in August, from the existing 9.7 million bpd.

While speaking to newsmen, Brown said he aligns with business leaders in the sector who have argued for more consideration in the allocation of production quotas by the Federal Government to meet with Nigeria’s supply limit of 1.4 million bpd.

“In terms of demands by indigenous operators, they do need a chance, they really need to be able to grow as a sector in the market otherwise, you have the dominance of major oil companies, then the government and that is not great in any oil mix.

Of course, we will welcome from government any help it can give the sector, we don’t sit with massive resources. We rely on external funding and equity investments, so we need to have a chance,” the Seplat boss said.

“Obviously what has happened this year is that we were all hit quite dramatically by COVID-19. From March this year, the whole world was shut down by the Corona pandemic. From then, there has been a price war among oil producers.

The benchmark went from $67 oil, to below $10 in Nigeria and it even went negative in the US,” the Seplat boss said.

SOURCE: orientenergyreview.com