Avuru: Crude Oil Price Above $80 Detrimental to Investments

The Managing Director and Chief Executive Officer of Seplat Petroleum Development Company Plc, Mr. Austin Avuru has stressed the need for crude oil price to stabilise around $60 per barrel threshold, saying that $80 oil and above could be detrimental to investments. Avuru has also called on African players in the oil and gas sector to focus on domestic energy security as the multinational companies are moving investment funds from oil and gas into the renewable energy sources.

He argued that even though the multinational majors are shifting to the new frontiers ogy Association of Nigeria (PETAN), the Seplat boss described what is generally regarded as low oil prices as the real balancing.

According to him, when crude oil approaches $80, $90 and $100, it encourages operators to embark on massive investments in unconventional sources of energy, which create glut in the oil market and crash the price.

Avuru added that when the price of oil is too low as in February 2016 when it was $26 per barrel, a lot of projects are deferred, adding that the $69 oil being witnessed currently is as a result of projects that were deferred.

“I was telling somebody that I am praying that it doesn’t get to $80 per barrel because it will draw us out. We are safe at $60. But by real balancing what I am referring to is the fact that when the prices get to certain threshold, certain forms of unconventional become attractive and over a period of time, it crashes the price. Conversely, when the prices are too low as we saw $26 in February 2016, a lot of projects are deferred. The $69 we are seeing today is as a result of projects that were deferred,” Avuru explained.

Avuru added that as the multinational companies are moving resources away from oil and gas to the renewable energy, African players should