The International Association of Drilling Contractors, (IADC) Nigeria, has said that despite the catastrophic effects of the COVID-19 pandemic on the oil and gas sector, the industry would rebound sooner than expected.
Speaking during a webinar organised by IADC, its Chairman, Chuks Enwereji, noted that the pandemic has caused the most abrupt recession in the oil and gas history, orchestrating marginal drop in growth, job and revenue losses, depleted demand for oil and gas, lower oil price, disrupted supply chains including compulsory quarantine procedures for offshore employees.
He said: “These disruptions have led to significant reduction in capital spending for most operators, and we have seen a number of contract terminations and suspensions since the onset of the COVID-19 pandemic. There has been a wave of bankruptcies in the industry, as most companies are unable to cope.”
Enwereji rolled out statistics indicating how the pandemic had profoundly affected the industry, adding that rig counts had depleted from 37 in February to 25 in March.
He continued: “By the end of July 2020, there were only 11 active rigs amid a whopping 67 rigs in-country. As at today, September 25th, a couple of more rigs have gone back to work and this continues to grow. We now have 16 active rigs across the land, swamp and shallow offshore as well as the deepwater.
“Our hope is further validated with the recently-concluded, 2020 Marginal Fields Bid Round, coordinated by the Department of Petroleum Resources (DPR), where a total of 57 fields located on land, swamp, and shallow offshore were offered.
“As oil prices rally above the $40 per barrel mark, and the reopening of economies around the world, we are beginning to see some rigs go back to work. If oil price goes to $50 per barrel, as has been the case in the past, we are consciously optimistic that activities will increase.”
To address the short and long-term effects of the pandemic, Enwereji proposed multi-phased approaches that include the adoption of health, social and economic methods to control and mitigate the effects of the pandemic, reactivate the business bearings, and rebuild in sustainable and inclusive ways.
He further announced the launch of a new official website; to help better relationships with partners, regulatory agencies, sister organizations and more.
Recall that global key stakeholders and players in the drilling subsector had in August, indicated full resumption of drilling operational activities in Nigeria.
But given that a significant number of countries remain far from achieving a sustained and significant flattening of the pandemic curve, the IADC Nigeria Chapter players were cautious on timing specifics.
In terms of health, the dynamics of contagion as influenced by acute disregard to laid down rules, was the centre piece of Mrs. Abioye Omoseni’s presentation. The association’s Treasurer cautioned management not to let down their guard on pandemic protocol as work resumes.
Omoseni made a case for human interaction at the workplace, “Management must promote the best of human interactions and pay attention to details. For instance, it is possible for a victim to recover and resume back at work and later test positive. Therefore, management must put up a robust interactive protocol including immediate report of noticeable mental imbalance and ensure adherence to all levels of compliance stipulated by Nigeria Centre for Disease Control, NCDC,” she said.