We need to cut down our production cost -Mrs Afolabi

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By Folarin Olarinde

The Chief Executive Officer, Reservoir and Facilities Solutions of Nigeria, and former Executive Director, Mobil Producing Nigeria Unlimited, Mrs. Oluseyi Afolabi has said that Nigeria needs to cut down energy production cost.

Speaking at the Annual Guarantors’ Dinner last Thursday, at an event hosted by The Petroleum Club of Lagos in Lagos on “survival strategies in a low price regime- a case for cost reduction, optimization and operational efficiency in the Nigerian Oil and Gas industry”, she said the growth in the energy demand is being lead by Indians.

She said that in terms of growth, India has overtaken China, stating that China is a lower-managed economy.

Afolabi stated further that natural gas seems to grow faster than oil.

She said, “We need to be looking in to how we can commercialize our gas resources to be part of that market, also we need to get cheaper to stay in business.

“In terms of process, there is a lot of process that we engage-in in the oil and gas industry: the people who want to start; your field development plan; your PFD (Planning for Development); and your field and excretion planning.

“You spend a lot of time trying to put all these work together, especially field development planning, so we should ask ourselves “what does DPR (Department for Petroleum Resources) really need? And maybe we should sit down with DPR and have a conversation to know what we are eliminating, because I am not sure that they read everything.

“We should know what’s really important to the DPR, that’s why we should streamline our regulatory requirements, because a lot of government departments ask you for same information over and over again that’s why you have to ask the question, do you really need it? Or are we just generating papers?”

She said “when there is a lot of supply the price rashes, and when there’s a lot of demand the price goes up.  Gas as well is the fastest growing source of energy because most people are concerned about their environment.  The demand for oil will flatten by 2030 as most people will be using gas as major source of energy by then.”

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