- Bristow Records Over 50% Drop in Operations
Leading helicopter service provider in the oil and gas sector, Bristow Helicopters Nigeria Limited, has hinted on over 50 per cent drop in operations due to the current economic downturn.
The development, though not unique to Bristow, has, however, warranted some drastic measures including the release of some workers and withdrawal of some aircraft from the Nigerian market.
Meanwhile, Bristow has acquired four brand new Sikorsky76D helicopters as part of its diversification and commitment to the Nigerian market.
Recall that the global oil and gas market has been in decline since the second half of 2014, with enormous effects on activities in the Nigerian oil and gas market. Helicopter operators, like Bristow, have been affected.
With reduced activities in the oil and gas sector, Bristow, like its competitors, has had to reduce its staff strength. In 2015, Bristow released 89 expatriate engineers and pilots, coupled with 26 support staff. As activity levels further dropped in 2016, the company released 29 expatriate engineers and pilots and 16 support staffs, coupled with 21 national pilots and engineers.
Managing Director of Bristow Helicopters in Nigeria, Capt. Akin Oni, told reporters that the lay-off was not unconnected with 50 per cent cut in fleet size, compared to what it operated in 2014/15.
Oni said: “In terms of flight activities, we are now about 45 per cent of what it was in 2014/15. That is the level of impact on us.”
He added that they had in the last one year shipped 13 aircraft out of Nigeria to other countries where their services are more required, given the impact of recession on helicopter services.
“Whilst the release of a staff is never an easy decision, the release of any national pilot or engineer is even more difficult. Most of our national engineers and pilots were recruited as cadets and received funding from the company for training.
“We very much view these national pilots and engineers as long term employees and future leaders of the company. It is, therefore, always a difficult decision to release our national staff,” he said.
On average, Bristow spends about $250,000 (cadet pilots) and $80,000 (cadet engineers) per annum on training its cadets until qualification as pilots or engineers.
The downturn in the sector and reduced activities notwithstanding, Oni said Bristow remains committed to operations in Nigeria, tapping into the bright side of fixed wing operations.
His words: “We have been operating in our present form since 1969 and intend to continue to operate in Nigeria. Our focus remains on providing a safe and efficient service throughout Nigeria.
“We are committed to developing new opportunities to serve the Nigerian market. Last year, we introduced a fixed wing business charter service operating the Lagos – Port Harcourt route for the benefit of our clients and other business corporations. This service is operated by two Embraer 135 aircraft.
“Last week, we expanded the service to include a Lagos–Abuja route, currently operating three days a week, as demanded by our clients. This service is an example of how we are able to diversify and provide a service outside our core oil and gas sector.”
In the oil and gas sector, Bristow has also introduced a search and rescue service, the first of its kind in Nigeria.
The MD explained that the service would be provided by a Leonardo AW139 with capabilities for both day and night rescue operations. The search and rescue service lends from the expertise and experience held by an affiliate UK company, Bristow Helicopters Limited, which provides a similar service to the United Kingdom.
Senior Legal Director at Bristow, Tolu Olubajo, noted that effective from April 1, 2016, parity in remuneration was established between their national and expatriate aircraft type-licensed pilots and aircraft maintenance engineers. This was sequel to an agreement reached with the National Association of Aircraft Pilots and Engineers (NAAPE) on the remuneration of their members.
Olubajo said that Bristow would continue to engage with NAAPE on compensation payable to the released national engineers and pilots, and remain open to an amicable dialogue to reach agreement on the matter.
COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020
Nigeria’s oil revenue declined by 41.44 percent in the first nine months of 2020 to $2.033 billion, according to the latest data from the Nigerian National Petroleum Corporation, NNPC.
This represents a decline of 41.44 percent from $3.47 billion filed in the same period of 2019 when there was no COVID-19.
In the September 2020 edition of NNPC’s Monthly Financial and Operations Report (MFOR), revenue from oil and gas rose by 16 percent to $120.49 million in the month of September, a 66 percent or $234.81 million drop from $355.3 million posted in the same month of 2019.
The global lockdowns caused by the COVID-19 pandemic plunged Nigeria’s crude oil sales and global demand for the commodity. This was further compounded by Nigeria’s high cost of production compared to Saudi Arabia, Russia and others that were offering discounts to boost sales during one of the most challenging periods in human history.
Experts like Prof. Yinka Omorogbe, President of Nigeria Association of Energy Economics, NAEE, were not surprised with the drop in earnings given the effect of COVID-19 on the world’s economy.
She, however, called for the revamp of the nation’s petroleum sector laws and diversification of the economy away from oil revenue dependence. She said “Covid-19 made 2020 a very hot year and it battered the oil industry internationally and we are not an exception; so we could not have been unaffected”.
She also said the effect of the fall “is definitely a wake-up call; we have to diversify, strengthen our other resources and capabilities”.
Omorogbe, a former NNPC Board Secretary, urged the government and the operators in the sector to look inward and think strategically, stating: “think medium term, think of where they want to be and the government, above all, must think of how best we can utilize our resources, so that we can achieve our objectives once we know and define them.
“It is a clear wake-up call, if not we will just sit here and find that we have become one of the poorest nations in the world”, she noted.
Crude Oil, Other Commodities Closing Price for Monday
Brent crude oil, Nigeria’s crude oil benchmark, gained 47 cents to $55.88 per barrel on Monday, while the US crude oil expanded by 50 cents to $52.77 per barrel.
Gold for February delivery fell $1 to $1,855.20 an ounce. Silver for March delivery fell 7 cents to $25.48 an ounce and March copper was little changed at $3.63 a pound.
The dollar fell to 103.80 Japanese yen from 103.83 yen. The euro fell to $1.2139 from $1.2167.
Wholesale gasoline for February delivery rose 1 cent to $1.56 a gallon. February heating oil rose 2 cents to $1.59 a gallon. February natural gas rose 16 cents to $2.60 per 1,000 cubic feet.
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
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