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Forex crisis, others hurting upstream productivity—Total MD

The Managing Director/Chief Executive of Total Exploration and Production Nigeria Limited, Nicholas Terraz, has raised concerns over serious drop in investments at the upstream petroulm sector, linking the scenario to forex crisis and militancy.

According to him, operators are now holding back investments, and the frustrating is reducing development drillings which are the core production activity in the oil industry.

He said the situation was being aggravated by funding challenges for the joint ventures as well as low oil prices.

Speaking at the 2016 Nigerian Association of Petroleum Explorationists Conference management session held in Lagos, Terraz said the situation had also resulted in the loss of activity and jobs for contractors providing services to the industry.

According to him, “Throughout 2016, we have faced a challenging economic environment, with an average oil price around $45 per barrel. This environment requires us to adapt and reduce cost without compromising safety, while preparing for a future of growth or expansion.

“While the impact of the low oil price is not peculiar to only Nigeria, the country is particularly affected because a large part of its revenue comes from the hydrocarbon sector. In addition to low oil price, Nigeria has also experienced a reduction in production volumes due to security issues.”

He added that the current situation is more challenging for both the country and the industry, as the government was facing revenue shortages, while oil and gas companies, on their part, have had to adapt to the present realities.

Explaining more the importance of the conference theme: ‘Nigeria Oil and Gas Industry: Tackling Our Realities’, Terraz said the meeting will afford operators to open up on what they have been passing through before and develop antidote for going forward.

While hinting that Total had added over 2.3 billion barrels to Nigeria’s production from 1966 to 2015 and, in the last five years alone, had made approximately $10bn of investments in the country, he noted that “Despite the challenging operating environment, Total remains strongly committed to the development of its activities in the country, while working relentlessly to adapt to the current environment”.