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 firms 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 1.4million 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.
The global oil market has been severely hampered by the corona virus pandemic, and a trade war among producers has impacted demand.
“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.
Brown said he believes that the supply restrictions from OPEC are ‘very much a 2020 thing and overtime it will resolve itself.’
The new Seplat boss, with over 25 years’ experience in the financial sector, was appointed CEO last month after the Austin Avuru, the former CEO retired.
The chartered accountant joined the company in 2013 as its chief financial officer, where his extensive financial, debt and equity capital markets experience in the emerging markets space, and in particular the African oil and gas sector has been key to securing financing for the company’s projects.
He said in the five years, Seplat plans to evolve into a large independent energy company delivering energy for the Nigerian population across different aspects in the oil and gas sector and delivering value for investors.
By Chibisi Ohakah, Abuja