Nigerian independent oil companies have been affected the most by the lingering plunge in oil prices, the Managing Director of Seplat Petroleum Development Company Plc, Austin Avuru has said.
Avuru spoke on Thursday, February 25, at the 13th Aret Adams Annual Lecture Series held in Lagos.
Speaking on this year’s lecture themed: ‘Low Oil Prices: Challenges and Opportunities,’ he said independent oil companies in the country were heavily impacted as they all borrowed to fund acquisitions and capital expenditure (capex) growth.
He said many independents are now cash negative and yet need more investments for production increase in order to survive, adding that the average price of $60 per barrel was required for most companies to survive this year.
“We need to embrace effective domestic utilisation of fossil fuels to survive, and because Nigeria is heavily dependent on oil to balance the economy, the drop in oil price was a huge blow to the country’s revenue,” Avuru said.
The Managing Director, Chevron Nigeria Limited, Clay Neff said Nigeria had the opportunity to improve its competitive position in the global oil and gas industry.
He noted that in this current situation, the country should restore investors confidence by providing competition in the oil market, adding that the security of lives and properties, and control stability and speedy approval processes should also be institutionalised.
The Chevron chief said the country should address its Joint Venture (JV) funding challenges and pay the arrears, adding that Nigeria had an attractive resource base.