OTC 2015: Oil Price Reduces Deals, Attendance
Nigeria upped drive for monetisation of 187tscf gas resources
Chineme Okafor When the exhibition floors for the annual Offshore Technology Conference (OTC) closed at 2 p.m. Houston time last Thursday, it was clear that extended lower prices of crude oil in the global market may have turned the tide on the conference; cutting down annual attendance and enthusiasm for making fresh hydrocarbon-related deals.
Even though the globally recognised largest gathering of hydrocarbon industry players had more exhibitors sprawled across extra spaces than it had recorded before, attendance at the OTC was however reported to have fallen by 13,600 to 94,700, suggesting that it is the lowest attendance recorded at OTC in three years.
As conference organisers stated this at the closure of the conference in Houston Texas, pundits suggested that the dwindling oil prices and lower attendance may have taken a heavy toll on vendors at OTC who instead of their expectations, rather reported a diminished appetite for new orders of state-of-the-art hydrocarbon technologies.
THISDAY at the conference learnt that a lot of industry players that would have been interested in buying or sealing deals for purchase of new equipment did not show signs of new appetite for equipment that were displayed at the conference because of lower or no budget to spend on them.
Also, instead of buying new equipment and hardware, industry players who spoke to the paper stated that they were rather trying to save money by repairing and extending the life span of their existing machineries.
Although, no vendor was willing to reveal specifics in potential deal making efforts, many of them however reported significant reversal from last year in such dealmaking opportunities when oil prices were at about $100 per barrel and the industry rode high on it.
While there were fewer sales reported at this years’ conference, companies also faced tighter budgets and sent fewer of their employees to Houston. Conference Chairman, Ed Stokes confirmed this when he told the Houston Chronicle that the development did not come as a surprise to organisers.
“We need to apply a little bit of common sense. The price of oil is at $60 now. It is not at $100. People are not going to be out there walking around with $20 bills hanging out of their pockets,” Stokes said.
Meanwhile, Nigeria unlike in past editions where it rarely put up campaigns for the commercialisation of its 187 trillion standard cubic feets of gas deposit, was everywhere, visibly marketing the potentials in its gas resources.
Obviously beaten on to the path by the dwindling crude oil prices, the country’s national oil company, the Nigerian National Petroleum Corporation (NNPC) mounted a vigorous campaign for monetisation of the country’s gas.
Starting from its formal declaration of the Nigerian stand at the OTC, to the session hosted by members of the Petroleum Technology Association of Nigeria (PETAN), the NNPC through its Group Executive Director Gas and Power, Dr. David Ige stressed that the country’s best long term route out of the crude oil price volatility is the monetisation of its gas resources.
Representing the corporation’s Group Managing Director, Joseph Dawha, Ige noted that with its immense gas potential, “Nigeria need not be and must not be a victim of price drop, instead we should position to benefit from it.”
While stating that Nigeria was willing to do what it takes to exploit her gas resources going forward, Ige said: “The Nigerian gas sector has seen tremendous focus in the last few years. We have grown capacity at a pace of 18-20 per cent with supply now at about two billion cubic feet of gas per day in the domestic market from a humble start of about 300 million cubic feet per day a few years ago.”
“We have built over 500km gas pipelines and we are building an additional 120km currently but we need to build many more kilometers of pipelines to connect new markets and gas sources.
We need investments in gas processing, micro-Liquified Natural Gas, Compressed Natural Gas as well as upstream Non-Associated Gas (NAG) development. Therein lies the compelling investment opportunities. It (crude oil price) brings to our collective consciousness the potential in Nigerian domestic gas sector. We can turn the gloom inherent in low price into a breakthrough for gas based industrialisation of Nigeria,” he added.