The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari has said that the COVID-19 crisis has shown that only the best of producers will survive because cost control has become a major issue for the industry.
He said this on Tuesday at the fourth edition of the Nigeria International Petroleum Summit (NIPS) in Abuja
Mallam Mele Kyari described cost as “everything” in the future of the industry.
He, however, added that the corporation and its partners were working together to make sure that it is achieved.
He mentioned funding as another major issue in the industry today due to the paucity of resources across the globe and overall reluctance by investing companies or banking authorities to divest from oil-related businesses.
“This is what we have to live with and what we have to contend with. Obviously, the best of the business that will survive are the ones that try to translate into much more climate-friendly businesses,” he said.
Kyari added that security remains a major issue for the industry in the country, but assured stakeholders that there is a concerted effort across the industry in the Niger Delta and all other locations to make sure that all the security threats are dealt with.
He stated that the industry must work together to look at advantages that are inherent in the transition, while moving from fossil fuels to renewables energy.
He said: “And to do this, you must automate, you must reduce your cost, you must be more efficient and also, we must be more collaborative in our approaches and this has paid off for us.
“Ultimately, this crisis that we face in the industry is surely an opportunity for us to do many things differently, and particularly more so in our country to see where the enormous gas resources can be converted to value and join the journey to blue and green hydrogen.”
Nigeria’s petroleum industry is the largest in Africa with proven Oil and Gas reserves of 37 billion barrels (bbl) and 192 trillion cubic feet respectively. The sector contributes about 10% to the country’s Gross Domestic Product and accounts for 95% of all exports.
Given that Nigeria’s Gas reserves have remained largely untapped, the country is expected to make a shift towards becoming a major producer and exporter of Gas.
