Low oil price is an incentive to oil bloc owners— SPE boss

The dwindling global oil prices have been identified as incentives to owners of oil blocs across the country to deveolp the sector.

Mr. Emeka Ene, Council Chairman of the Society of Petroleum Engineers, (SPE), disclosed this in an interaction with the media ahead of the 39th Edition of Nigeria Annual International Conference and Exhibition billed to hold betweenAugust 4- 6, 2015, at Eko Hotel and Suites, Lagos state.

Ene stated that the energy summit would bring the various operators of the oil and gas industry sector together, he also disclosed that the challenges facing the sector is an incentives for investment within the oil and gas value chain.

According to him, any investor investing in the country’s energy sector must be aware that any investment done at this period is specifically meant to serve a long term purpose, estimating the lifespan to roughly 10 years and above.

The expert however said that whenever the investors are making their petroleum economics, they must realize that such investment decision are not for two or three years business plan, but for 10 and above for the entire life of the particular reservoir.

He said, ”the dwindling oil price is an opportunity to further increase the amount of oil that is being drilled out of the oil blocs across the country.

Such huge production and investment decision is tied to a long term return.

Therefore, in the case of Nigeria, which is a conglomerate of different oil blocs, strategic objectives needed to be made by investors in down circle, in order to reap in the up circle.

The great economic decision that could be taken by any investors is to buy low and sell high. It is when the prices are low that an investor needs to buy the barrels.

However when the prices are high you sell you start selling.

”While is It is difficult to source for funds from the local financials sector due CBN’s regulation.

The owners of the oil blocs must harness other means of raising funds. They need to get partners and ensure liberal terms to attract investors and players.

If you have a partner during the low circle, when the price goes higher everybody benefits.’’

”We have to understand that the industry has evolved. In the past we had buyers already waiting for our product.

But today, the United States import zero product from Nigeria and they are set to export their barrels. We must understand that the market dynamics has changed.

The challenge the country has is not that they have problem to sell their barrels, but there is a glut for sweet oil which is what we have because of the type of product our refinery accept.

Nigeria need to work out partnership with other countries with hard crude like Venezuela who depend on light crude likes ours to blend their crude for the production in their refineries.

The market glut is as a result of the oversupply of crude oil. However the demand for sweet crude is needed across the various refineries to blend the over supplied hard crude.