New Approaches for the Future of Hydrocarbons

Chief Timipre Sylva, Minister of State for Petroleum Resources

Speaking at the inaugural ceremony to welcome guests at the 4th edition of the Nigeria International Petroleum Summit (NIPS), the Minister of State for Petroleum Resources, Chief Timipre Sylva, said when the summit was conceived by the administration around 2016, there was no pretense about the objective. It was conceived to be the pre-eminent oil and gas industry event by Nigeria for Africa and global oil and gas industry.

“Three editions down the line and now the fourth one, I can boldly say that NIPS has truly attained its objective.”

The Minister said credit goes to President Muhammadu Buhari, for his leadership, steadfastness and unalloyed support towards ensuring that the country’s oil and gas industry, which lays the golden egg, is on the sound footing.

He reiterated that this years’ NIPS comes on the eve of the award of new marginal field licenses after several failed attempts over the past 20 years.

“I am elated because getting these new set of marginal fields off the ground are definitely the stepping stones needed towards achieving the country’s aspiration of 4 million barrels daily crude oil output and 40 billion proven reserves.  I have no doubt that the country is now on the right path to achieve that dream,” the Minister added.

This year’s theme is; “From crisis to opportunities: New approaches to the future of hydrocarbons,” is apt.

It is true that the industry has been overwhelmed by unprecedented crisis as a result of COVID-19 pandemic. “The crisis heralded volatile challenges, uncertainties, low oil prices and financial impacts that led to downsizing and bankruptcy in some instances, but I want to focus on the brighter side. That is why for me, the meat of this year’s theme is; “The new approaches to the future of hydrocarbons”.

Sylva pointed out that the scenario being projected by some experts is that energy transition and weaning world of fossil fuel would make the world a better place but that is not going to happen overnight. Hydrocarbons have provided majority of world’s energy for centuries and that fact is not going to change suddenly.

The Minister said he was yet to see disruptive technology that has great flexibility, affordability and applicability to replace oil and gas in the near future.

With increasing oil price volatility and pressure for cost reduction, the industry needs to reinvent itself so that it can fully utilize dividends to set the country on path to industrialization and prosperity. This is where the summit is focusing on new approaches.

Chief Sylva opined that the new approach is collaboration which is the paradigm shift of the summit.

“I know that collaboration has been a buzz word in the oil and gas industry for years but the industry has equally paid lip service to it. With new set of marginal field licenses on the scene, there is no better time to shift the mindset but now. I say this because at this time of unprecedented crisis occasioned by the COVID-19 pandemic, there is no better strategy to achieve success for these new marginal fields especially for the cluster of contagious fields.”

Increased competition, low levels of trusts are all barriers to collaboration but at the same time there is no better way to deal with increased risks and global market instability which the industry faces at this time. The industry needs to overcome the strategy of working in silos and embrace collaboration and knowledge sharing.

There is need to fully entrench the culture of collaboration by working together, sharing knowledge and expertise, pooling talent and resources amongst teams, industry peers and MDAs at all levels.

“That is a sure way the industry can decrease waste, improve efficiency and lower its breakeven costs for the industry’s survival and chart its eventual return to sustainable profitability.”

The Minister enjoined industry leaders to embrace culture of collaboration for the oil industry to forge ahead.

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