BusinessDay
Nigeria's leading finance and market intelligence news report.

Oando urges Oil producers to be optimistic in face of mounting challenges of COVID-19

…says some operating costs are beyond their control

Oil producers have been advised to remain optimistic in the face of the current Coronavirus pandemic which has devastating effect on their operations.

The companies are currently facing some challenges beyond their control especially in the area of operational costs.

Alex Irune, chief operating officer at Oando Energy Resources gave the advice while answering questions on CNN on the effect of COVID19 on the oil and gas industry and plans to mitigate it effects.

The Oando boss who spoke in respect of the financial viability of the companies after the Pandemic must have been curtailed, said: “What we must do is stay optimistic. I know for most Oil Producers currently, there are costs that as Independents, we have very little control over, so if I break down those operating costs for you, there is a 20-40 percent that sits out of our control in terminal fees, transportation fees for crude, we have very little control over that.”.

He said as Independents, their human resource, payroll, operations; are where they look to make those cuts and of course the capital side.

Read also: Forte, Oando, PZ exit NSE-30 in recently reviewed market indices

On whether this would be enough to make the companies stay afloat, he stated that it would depend on the price of crude oil.

“I think the question is the price of oil. We’re seeing an uptick in the price, we are seeing the decision by OPEC to cut 10 million barrels come in to realise the intention of OPEC; they’ve taken that huge step. But more importantly, the Government is stepping in to ensure that Independents like ourselves are engaged in conversations to ensure a process of survival, which is indeed a process for us, is managed jointly, to see that it takes the least amount of time to a recovery.”

On what has been achieved in respect of resources put together by corporate bodies to ensure that good health infrastructures are put in place to fight COVID19 pandemic, he stated that he has witnessed impressive showing of private sector stepping forward and taking on the challenge COVID19 pandemic.

“Look, the industry at large, Russia and Saudi Arabia accelerated potentially what could have been a more manageable situation at this point, but we are where we are. We’ve made the sacrifices and taken the decisions, but what we’ve seen is the likes of the National Oil Company leading us as partners, putting in about $40 million and more into that basket. We’ve seen a larger group of banks and other institutions come in, and for us the key is this – the effective spend and distribution of those funds through the palliative measures we have all set out to push to the most needy and the most vulnerable, because that’s really what this is about.”

He stated further by saying, Yes, COVID19 will come and we will deal with those issues, but there will be casualties after we’ve dealt with the pandemic and for a lasting solution, his company for once has taken a step to create an aggregator platform to combine donors and last mile solutions to non -governmental organisations (NGOS) and boots on the ground.

The company he stated is encouraging people to come in and donate so it can disperse this money and get it to those that really need it. It’s been an amazing showing by the private sector. “Dare I say, they have made the difference.”

Whatsapp mobile

Get real time updates directly on you device, subscribe now.

Comments are closed.

{"wp_error":"cURL error 28: Failed to connect to ekr.zdassets.com port 443: Connection timed out"}