- Nigeria’s Crude Oil Reserves Rise to 37bbls
The relative peace in the Niger Delta has begun to yield dividends as the nation’s crude oil reserves, which had plummeted to 28.2 billion barrels (bbls) at the height of militant attacks on oil infrastructures, have now risen back to 37 billion barrels. Also hauled in is the improved 192 trillion cubic feet of gas (tcf) from the previous 186 tcf figures.
A statement in Abuja by NNPC’s Group General Manager Public Affairs, Mr. Ndu Ughamadu, quoted the Group Managing Director of the corporation, Dr. Maikanti Baru, in his end of the year message to the corporation’s workers.
Baru, however, did not disclose details of the contracts or how much money the corporation saved from the renegotiations. But he said the NNPC would continue to find sustainable solutions to the challenges of militancy which affects oil and gas production in the Niger Delta.
Prior reports indicated that Nigeria’s crude oil reserves was depleting and subsequently dropped to 28.2bbls. This development also prompted the President of the Nigerian Association of Petroleum Explorationists (NAPE), Nosa Omorodion, to in October 2016, raise the alarm.
Omorodion decried the lack of exploration in the country’s oil and gas sector, and requested the federal government to begin seismic work in the frontier sedimentary basins, which include Bida Dahomey, Anambra, Gongola, and Sokoto to improve Nigeria’s hydrocarbon reserves.
Baru said the reserves have again risen to 37bbls. He added that the NNPC has created security management platforms that would enable it identify and evaluate risks, develop and superintend implementation of investigations, and aggregate and deploy necessary resources to guarantee peaceful business environment in the Niger Delta region.
He stated that the corporation was committed to implementing a robust security and stakeholders’ strategy that would sustain peace in the industry’s operational bases.
Baru expressed happiness with NNPC’s completion of negotiations with its Joint Venture (JV) partners on cash call funding challenges and payment of outstanding arrears.
He said this was achieved by developing a clear payment plan as well as the pursuit of an alternative funding strategy, adding that arrears of up to December, 2015 have been fully reconciled and repayments plan also agreed upon.
He said the decisive objective of the recently signed off agreements between NNPC and its JV partners was to enable NNPC transit into an Incorporated Joint Venture (IJV) business model for all the current JVs.
He said the NNPC had been able to stabilise the supply and distribution of petroleum products in the country with support from Nigerians and its staff, and commenced the implementation of a 12-key business focus areas to enhance its business performance.
“Today, motorists drive in and out of filling stations with ease. This would not have been achieved without the collective efforts of all of us,” Baru said.
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.
Crude Oil Holds Steady Above $55 Per Barrel on Tuesday
Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.
Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.
While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.
On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”
“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.
Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.
Crude Oil Pulled Back Despite Joe Biden Stimulus
Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.
Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.
On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.
OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”
“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”
Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.
“The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.
Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.
But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.
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