Monday, 8 May 2017

Oil Companies Cut More Than 440,000 Jobs - NNPC

The Nigerian National Petroleum Corporation (NNPC) has expressed that the present downturn in the oil and gas industry has made companies to cut 440,000 employments globally since 2014.Oil Companies Cut More Than 440,000 Jobs - NNPC

 In a keynote address at the current tenth Annual sub-Saharan Africa Oil and Gas Conference held in Houston, Texas, United States, NNPC's Chief Operating Officer responsible for Ventures, Dr. Babatunde Adeniran said notwithstanding the job cuts, there were retirement of workers who began their professions in the 1970's and 1980's. 

"Shockingly, the industry is not doing what's needed to pull in young millennials to fill the knowledge gap created by the latter exits. The cutting back and absence of job opportunities in the industry have created a circumstance where numerous students no longer need to enroll in oil and gas-related courses. There is an imminent talent shortage," he said.
 
Adeniran, who discussed on: "Current condition of our Industry and the Transformational Adjustments Required to Succeed in this new Petroleum Era," noticed that universities in Nigeria and sub-Saharan Africa should twofold their graduate supply of petro-technical experts by 2020.  

He said the disclosure of inexhaustible unconventional resources like shale oil and gas had by and large changed the worldwide oil and gas scene

"On the supply side, low prices and increased price unpredictability have moved the industry from huge complex mega projects that will oblige years to create to smaller, quick-to-monetise discoveries,” he said.

Adeniran said there had been an outlook change from "huge oil" to "quick oil".

As per him, the U.S. shale and light tight oil (LTO) players with short exploration-to-production cycles and low breakeven costs have turned into the new "swing producers". 

Besides he stated, they can react quicker to market request and are pushing out slower, higher cost producers from the supply curve.

He said the oil and gas industry is at a cross-street as the central changes, which had happened throughout the most recent five years, have permanently disturbed the supply and demand dynamics.

Adeniran added that many oil and gas- rich countries now face the risk that their unproduced reserves might become worthless in future.

He further stated that undeveloped resources are likely to become “stranded” in the ground.

To thrive in the new petroleum era, Adeniran argued that companies needed to re-think the essence of their business and their role in the value chain.

“Thinking outside the box: Over the last three years, IOCs have been less susceptible to upstream margin erosion from oil price drop because of their diversified presence across the value chain. Likewise, leading NOCs like Statoil and Saudi Aramco have been optimising their “non-oil” ventures in properties, shipping, medical, insurance and bio-fuels, and so is NNPC. NNPC is beginning to toll along this line by creating “Ventures” Directorate in 2016 to commercialise some of its “cost center” entities and create non-core businesses for additional revenue generation. Adopting a diversified portfolio provides a natural hedge against the inherent volatility of the upstream business,” he explained.

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