LAGOS

The Nigerian National Petroleum Corporation (NNPC) said its latest move to re-negotiate Oil and Gas contracts is a part of a series of measures to save the nation from the devastating sharp fall of revenues from the oil Industry.

In a presentation at the 33rd Annual International Conference and Exhibition organised by Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, the state agency told a gathering of major industrial players that the move is directed to ensure that both state and industry players can stay afloat in the uncertain crude market.

“We must renegotiate our contracts to reflect current market realities. If the cost/unit barrel remains exorbitant at current low prices, oil production becomes economically not viable; it will simply be left in the ground”, Notes the statement by NNP Managing Director Dr Ibe Kachikwu

A latest report by Global finance analyst Bloomberg says Nigerian government business has lately hit a snug due to the narrowing of income from crude oil sales. Bloomberg attributes limited income to the grand fall of global crude oil prices.

Also see; Analysis: How dependency on crude Oil sales is crippling Nigerian economy 

The unending fall in oil prices has resulted in massive job cuts in the oil industry, with Nigeria’s oil and gas companies slashing about 120,000 direct and indirect jobs.

According to National Industrial Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, , the dwindling oil prices had affected the expected revenue of oil companies, with some of them declaring massive losses.

Notably, state certified fuel importers  have business crippled because banks have refused to lend them money citing that operators are not repaying with interest at an agreed date

According to the Chairman, Integrated Oil and Gas Limited, Captain Emmanuel Ihenacho, “More than 70 per cent of the operators in the oil sector want to import fuel in the wake of lopsided performance of the four national refineries but are unable to do so because banks have shut down credit windows against them”

He said operators now rely on fuel allocations or supplies from the Federal Government which has prompted them to operate below capacity.

Ihenacho said the country needs to adopt and implement a policy that will operationalize all the four national refineries in order to solve perennial fuel crisis and its devastating effect on foreign exchange.

“There is need for a paradigm shift from importing to refining in the country. This shift can only be made possible when more refineries are allowed to operate. Why can’t we encourage companies to establish more refineries to meet the fuel needs of operators in the downstream sector?”

Nigerian Association of Petroleum Explorationists (NAPE) president Chikwe Edoziem, tasked major industrial players and government to look at the low crude oil price as an opportunity to be efficient at every point along the value chain of the industry.

Edoziem tasked the Buhari administration to consider structuring a self-adjusting fiscal regime that would take cognizance of the vagaries of crude oil price.

“Such fiscal regime should be structured to favor exploration work” he said