A major Nigerian independent oil and gas firm, Seplat Petroleum Development Company Plc, is looking to cut costs by at least 30 per cent to counter a crash in crude prices, its Chief Financial Officer, Roger Brown, has said.

Royal Dutch Shell, a global oil giant with huge presence in Nigeria, said on Monday that it would lower its capital spending for this year to $20bn or less, compared with its previously planned level of around $25bn.

The company also said it would reduce its operating costs by $3bn to $4bn a year over the next 12 months compared to 2019, as well as achieving “material reductions” in working capital.

Reuters quoted Seplat’s COO as saying on Monday that the company’s cuts, which would ideally be higher in the short term, would see its drilling plans reduced to three wells from the 15-20 it had planned.

The oil price, which has been under pressure from the coronavirus pandemic and the price war between Saudi Arabia and Russia, plunged to a record low of $24 per barrel last week.

“We are cutting back on capital expenditure quite significantly and focusing on higher, more prolific oil wells,” Brown said.

Seplat had hedged 60 per cent of its production at $45 per barrel through to the end of the third quarter. But Brown said the company needed to be prudent as oil prices could fall further.

“We don’t think we’ve hit the bottom of that yet,” he said of oil prices, adding, “It’s too early for us to call that.”

In the 2019 fiscal year, Seplat spent $125m on capital expenditures, including drilling nine development wells.