Oil and gas industry players have been urged to adopt cost-saving processes to stay afloat as oil price plunge leads to cancellations of significant projects and delays put at $600 billion.
The Managing Director/Chief Executive Officer, First Exploration and Petroleum Development Company Limited, Ademola Adeyemi-Bero, who gave the advice, said the over-supply and oil in storage are still at record levels, which is about three billion barrels.
Adeyemi-Bero said global demand growth for oil would continue steady at 1.2 million barrels per day (bpd) per year.
He noted that the global over supply has been driven by the United States shale play and Canadian oil sands mines, despite the fact that United States oil and gas drilling experiencing a historic drop, well below 1990’s levels.
Adeyemi-Bero said US oil shale reservoir declined by 6.8 per cent monthly, but that these factors don’t have visible impact because of market over-supply.
He said most private players were driven by major budget cuts and shortages and that Brent oil price has reached bottom level while Henry hub gas price touched below $2 per million standard cubic feet (mscf) with the US exporting its first liquefied natural gas (LNG) cargo in over four decades.
He said to counter oil price volatility and instability, said smart solutions must be deployed to derive maximum value during project development and execution and throughout asset lifecycle operations.
He moved for the use of low unit technical cost (UTC), such as maximizing hydrocarbon recovery and reservoir development and reservoir and facility management.
