The Managing Director, Shell Petroleum Development Company (SPDC), Mr. Osagie Okunbor, has sought a solution to the contracting circle in the industry.
According to him, in an interview with KPMG magazine, there is a need to review and shorten the length of the contract threshold.
The review, he said, is of importance to the Joint Ventures and the contracting circles.
His words: “The contracting cycle is the third major enabler that needs to be addressed. OPTS4 has looked at contracting cycles across jurisdictions and Nigeria is an outlier because of our lengthy contract cycle. We need to explore avenues to shorten the length and examine contract thresholds, which is a significant part of the JVs and contracting cycles.”
Okunbor, who is also the Country Chair of Shell, noted that there is need to consolidate security situation in Nigeria, especially in the Niger Delta.
While emphasizing the need to partner the Federal Government to ensure the security of oil and gas assets and for production, he recalled that a reoccurrence of violence in the region in 2016 severely impacted oil production negatively.
Okunbor said oil is a major component of the global and local energy mix that will continue to remain relevant in the medium term. He, however, stressed that the expectations have changed.
According to the SPDC boss, “Oil will remain a relevant component of global energy mix, and even more so for Nigeria, over the next 10 to 15 years, if not more.”
Continuing, Okunbor insisted that “the mix will not radically change. What is clear is that society expects low-carbon footprints going into the future. I think that is key and everyone, particularly those who are as big as Shell, understands that and will work with society to change.
“We are cutting our carbon footprint by a significant proportion going forward, not just in terms of what we directly produce, but also our usage and our by-products. This requires that we continue to refine our systems and processes to ensure that the carbon intensity of our production continues to go down.”
Okunbor added that the SPDC will significantly leverage technology and digitisation to further enhance its business systems, processes and operations in Nigeria.
He said: “We are a part of a global business, and in our sector, what differentiates us is how we commercialise technology and grow top and bottom line with technology. We pioneered deep-water exploration and production in Nigeria. We continue to push boundaries and Shell in Nigeria takes maximum advantage of the technological and digital capabilities of the Shell Group.”