Africa Press-Nigeria:<\/p>\n
With the crude oil market likely to remain depressed for the rest of 2020, some oil servicing companies in Nigeria may eventually go bankrupt, Agusto & Co. has said.<\/p>\n
The rating agency and research firm, in its 2020 oil and gas servicing industry report, said the Nigerian oil and gas servicing industry had recorded a substantial increase in the number of indigenous servicing companies in recent years.<\/p>\n
\u201cThe industry is dominated by a few foreign servicing firms, which are estimated to be engaged in close to 60 per cent of oil and gas projects in Nigeria,\u201d it said.<\/p>\n
According to the report, local firms currently dominate less complex field support services such as security, transportation and procurement due to relatively low scalable technology compared to the foreign counterparts, among other factors.<\/p>\n
It noted that the COVID-19 outbreak had worsened conditions in the oil market.<\/p>\n
The firm said, \u201cSeveral key projects in Nigeria, including the Obiafu-Obrikom-Oben pipeline project and Shell\u2019s Bonga North field development, have been suspended due to lull in the crude oil market.<\/p>\n
\u201cDelays in sanctioning of these projects will impact Nigeria\u2019s oil and gas servicing industry\u2019s near to medium-term performance, considering the substantial contracting opportunities these projects provide.<\/p>\n
\u201cOwing to prevailing difficulties in the operating terrain, a number of operators in Nigeria including international and indigenous companies have slashed contractor rates by up to 50 per cent while capital budgets have been reviewed downwards by an average of 20 per cent.\u201d<\/p>\n
The report noted that several promising exploration and incremental projects had been stalled partly due to the unfavourable regulatory stance.<\/p>\n
It said, \u201cThis situation is expected to be worse off considering the adversities created by the COVID-19 pandemic. Agusto & Co. expects the crude oil market is likely to remain depressed for the rest of 2020.<\/p>\n
\u201cAgusto & Co. expects a huge number of job losses, while some oil field servicing companies may eventually go bankrupt.\u201d<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Africa Press-Nigeria: With the crude oil market likely to remain depressed for the rest of 2020, some oil servicing companies in Nigeria may eventually go bankrupt, Agusto & Co. has said. The rating agency and research firm, in its 2020 oil and gas servicing industry report, said the Nigerian oil and gas servicing industry had […]<\/p>\n","protected":false},"author":62,"featured_media":9873,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[1451,228],"class_list":["post-29609","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-covid-19","tag-oil-production"],"yoast_head":"\n