COVID-19: NSChE Laments Negative Impact Of Pandemic On Oil, Gas Sector



The Nigerian Society of Chemical Engineers (NSChE) Edo/Delta States Chapter, has lamented the huge negative impact of the Covid-19 pandemic on the Nigerian oil and gas sector, and urged the Nigeria National Petroleum Corporation, NNPC to totally resort to pipeline for petroleum products distribution.

This was contained in a communique issued at the end of a public lecture tagged ‘Maximizing the Gains of Covid-19 Pandemic in the Nigerian Oil and Gas Sector: The Role of Chemical Engineers’ held on zoom virtual platform.

The communique signed by the Chairman, NSChE, Edo Delta Chapter,
Engr. Mrs Rosemary Imhanwa and Chairman, Public Lecture Committee of Chapter Dr. E.O. Ohimor, noted that Covid-19 pandemic had dealt a big blow to the oil and gas industry globally.

The communique read: “In order to survive the painful period of huge drop in revenue and restriction in movement, oil and gas companies adopted different strategies. Capital Expenditures (CAPEX) were reduced drastically, Operating Expenditures (OPEX) were also brought down. Other measures include re-negotiation of existing contracts, optimization of resources and deeper collaborations among industry players.

“As a result of reduced CAPEX, rig counts in Nigeria dropped from a peak of 19 in the first quarter of 2020 to 8 in May, 2020. This will definitely lead to decline in production volume in the near future. The service companies within the oil & gas value chain received the greatest pain as a result of reduced CAPEX, since many contracts were either suspended or cancelled.

“According to Fitch Ratings, the Covid-19 pandemic and the resulting oil price crash are set to wipe out as much as US$1.8 trillion globally from the revenues of oil and gas exploration and production companies this year – the worst-hit sector in terms of dollar revenue. Covid-19 would cause Nigeria to suffer the biggest loss in the African continent with USD15.4 billion, representing about 4% of the nations GDP, and USD58 billion in oil projects set to suffer delays or cancellations due to reduced CAPEX (The Atlantic Council, 2020).”

On the gains of Covid-19, the communique noted that “some of the survival strategies adopted by the oil and gas companies will outlive the pandemic and may continue to add value to organizations.

“Some of these survival strategies, include use of Artificial Intelligence (AI), optimal use of Information Communication and Technology (ICT) and use of webinars to mention a few.”

The communique further noted that
“The emerging social order and the attendant opportunities and challenges is a call to action for the Engineering Profession. As it is now, for example, our nation has to look inwards for the large quantities of drilling fluid products, chemicals and spares used in the oil and gas industry annually.

“The reasons for the low patronage of Nigerian products, ranging from quality, certification, high costs and stock availability for sustainable operations in line with industry standards, have to be addressed squarely.

“Some other suggestions as to the way forward is for the NNPC to totally resort to pipeline for petroleum products distribution, have numerous unmanned mega PMS/AGO and gas retail outlets, and lastly, fully integrate and optimize our network of oil and gas operations.
Artificial Intelligence (AI) and Information Communication and Technology (ICT) should be fully incorporated in all tertiary institutions curricula.

“NCD and NAPIMS in collaboration with IOCs should set up a team to verify the listed local Producers/manufacturer of products required by the Oil & Gas sector, then come up with modalities of funding in order to enhance capacity and quality.
Local Producers should be assisted and supported to strive to obtain international certification of their products for sustainable operations in the Oil and Gas operations.

“Finally, the chemical engineer as major player in the oil & gas sector needs to creatively maximize opportunities from the new social order in upstream and downstream operations. The prospects of maximizing the emerging opportunities for better operations are good but only require the consciousness and will of all, especially Chemical Engineers. ”

As part of its corporate social responsibilities, the Nigerian Society of Chemical Engineers (NSChE) Edo/Delta States Chapter a division of the Nigerian Society of Engineers (NSE) yearly, embark on public enlightenment by way of public lectures.

The theme and topics of every of the series of public lectures is usually drawn from issues of national importance that also bothers on the Engineering family. The theme of the 2020 Public Lecture was Maximizing the Gains of Covid-19 Pandemic in the Nigerian Oil and Gas Sector: The Role of Chemical Engineers.

It had two paper presentations; the Impact of the Covid-19 Pandemic on the Nigerian Upsteam Oil and Gas Sector:the Pains and Gains and maximizing Downstream Oil and Gas Operations in a Covid-19 Social Order.

The 1st paper was presented by Engr. Duke Omonigho Onojuvwevwo (M.Eng Chemical Engineering, MNSE, MNSChE, MSPE); Senior Production Operator, Midwestern Oil and Gas Company Ltd, Umusadege, Delta State, while the 2nd paper was presented by Engr. Dr. Princewill W. Igbagara (Ph.D Chemical Engineering, LLB, MNSE, MNSChE); Ag. Director, Centre for Research Innovation, Federal University of Petroleum Resources, Effurun, Delta State.

The event was also supported by three oilfield chemical companies; Skyward Resources Ltd, Darew Ventures Ltd and Humigrati Chemical Co. Ltd.

Omamuzo Efidhere

Omamuzo Efidhere is a registered member of the Nigerian Union of Journalist

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