Kachikwu allays fears over oil slide leading to firms bankruptcy
The downward slide in the price of crude oil in the international market is not a strong threat to railroad oil firms and financial institutions into bankruptcy, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu has said.
Speaking at the closing ceremony of the Sixth African Petroleum Congress and Exhibition (CAPE VI) in Abuja yesterday, Kachikwu, was quick to add that only companies that are willing to embrace new technologies and adopt innovation would survive the difficult operating environment.
Kachikwu revealed that as parts of strategies to survive, the Federal Government is driving oil companies operating in the country back to full time work and also exloring alternative funding sources for some of its oil projects and partnerships.
He said: “I think anybody who wants to survive in this climate today would need to put on the hat of thinking. It is not business as usual, but people are going to survive. The nice thing about adversity is that you get to make huge successes also. Companies that are ready to embrace new technologies and strategies and new ways of doing things are going to survive. It is not going to be for too long. Nigeria for example, has put its strategies around getting the oil companies back to full time work, and we are still looking at alternative funding sources, we are still looking at diverging more into our gas products to complement our oil production. New ideas of how to survive and how to multiply the sort of income that is available to you is
key to survive. I think Nigerian companies are very resilient, they will survive.”
Kachikwu further stated that oil-producing countries, as well as oil and gas companies have come to the sudden realisation of not only the need to cut cost, but also in ensuring the efficient management of proceeds from crude oil production and sale.
He also called for the opening of the African economic space to drive investment in the continent especially in critical sectors like the petroleum sector and help buoy production.
He explaied: “There is a sudden realisation that not only do we need to come together to cut our cost to see how to survive in this unhealthy petroleum climate but also that countries would need to do a whole lot more in terms of how they utilise the proceeds of production going forward. The unity is fine, the coming together is fine, I think what you will find is opening of the space so that investments will also come to Africa and its territories. Obviously people are concerned about how much you put in the value chain, to ensure you get the very best out of the very tight situation.”
Also speaking on the unending fuel crisis in Nigeria, Kachikwu said the Federal Government is considering deploying information technology in the Premium Motor Spirit (PMS) supply chain to end the perennial fuel queues witnessed across the country.
He disclosed that the Federal Government plans to computerize the supply process from export of the product down to the sale of the product to motorists.
He argued that computerisation is one of the key initiatives that are being considered in tackling the fuel shortages, especially as it would enable the tracking of products discharged from oil vessels and tankers to depots.
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