Oando to focus on existing oil and gas reserves

1135777315 cf4b11cf75 zWhile the oil price remains volatile, Nigerian independent Oando plans to focus on existing reserves rather than undertake extensive exploration activities

This is according to Oando CEO, Pade Durotoye, when he spoke at Africa Independents Forum in London this week. He said that ongoing oil price volatility is "in spite of or maybe because of action OPEC has taken", adding that the long-term production cut could embolden US shale oil producers to increase supply. He said that the "slow pace of recovery" means the oil price will be "buzzing around US$50 to $60 for quite a while."

"Nigerian capital is still a little bit constrained," he said when talking about the challenges facing the Nigerian oil industry. "The worst is behind us with sabotage [but] we are still dealing with oil theft."

He told the conference that stolen oil from the Niger Delta used to be exported but now it tends to be refined in Nigeria and used for the domestic diesel market. The theft problem is affecting investment in the Niger Delta region, according to Durotoye.

"People still look at the Niger Delta with a lot of caution. There is a reluctance by the oil majors to aggressively address the issue," he said, adding that indigenous companies are more proactive in this regard.

"We are used to doing things for ourselves," Durotoye said. "Nigeria is turning a big corner, I am optimistic."

"Very bold action has been taken to identify who was involved [in theft and sabotage] and we have now had our first 100 days of no interruption to production," he said.

An agreement made with the NNPC in December 2016 to pay back an outstanding cash call, as well as progress on the OB3 pipeline, have added to his upbeat outlook. He said that the Petroleum Industry Bill (PIB) is "moving at a more assured place" and that if it is passed in the second half of 2017, "that would be truly magical". 

Durotoye said that a focus on trapped gas in existing projects is important, with ambitions of "changing the energy mix" by supplying more gas to Nigeria's domestic market.

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