- Kachikwu Clarifies Nigeria’s $100bn Loss to Militancy in Niger Delta
The Minister of State for Petroleum, Dr. Ibe Kachikwu, has clarified the $50-$100 billion said to have been lost to the attacks of oil and gas infrastructure by the Niger Delta militants.
In his recent monthly podcast, the minister was quoted as saying that Nigeria lost $50-$100 billion in oil revenue at the peak of the militant attacks on oil and gas facilities in the Niger Delta, which slashed oil production from 2.2 million barrels per day to one million barrels per day last year.
But in a statement yesterday, the Technical Assistant (Media) to the minister, Uche Ozurumba Adighibe, made a clarification on the $50 – $100 billion unearned income lost to militancy, which was mentioned by the minister.
Adighibe, who quoted the minister as having said in the podcast that “as at 2016 on the average and looking at it historically that we (Nigeria) was losing $50 – $100 billion as result of the disruption,” said the amount covers a period of 10 years and not 2016 only.
On the amount lost in 2016, Adighibe pointed out that the Nigeria’s oil and gas industry lost over $7 billion to militancy from January to October 2016.
“Please note the word ‘historically’. Over the last decade spanning through various administrations, the oil industry in Nigeria has suffered critical disruptions to operations resulting in the unearned incomes amounting to $50 – $100 billion due to militancy activities and vandalism. This can be verified through the records provided by the Nigerian National Petroleum Corporation (NNPC) during the 2016 Fiscal Liquidity Assessment Committee Retreat which showed that the industry lost over $7 billion due to activities of militancy groups and oil pipeline vandals from January 2016 –October 2016,” Adighibe further clarified.
The minister’s technical assistant added that the amount mentioned as unearned income due to militancy activities as stated in the podcast covers the entire industry which includes the international oil companies (IOCs), independent producers as well the Nigerian National Petroleum Corporation (NNPC).
To tackle the scourge the minister, who spoke on “Oil Sector Militancy Challenges…Roadmap to Closure,”also unveiled a 20-point agenda aimed at instituting permanent peace in the oil-producing region.
According to him, the Niger Delta crisis, coupled with the 45 per cent drop in oil production, worsened the financial challenges of the President Muhammadu Buhari administration.
Kachikwu said the crisis resulted in attacks on oil and gas facilities and the sub-optimal performance of the refineries, stressing that Nigeria was unable to meet its international obligations as a result of the militancy.
He said despite all efforts made by successive administrations to tackle the militancy in the Niger Delta, a permanent solution was never found.
The minister also stated that the present administration has also made efforts to end the crisis by launching a seven-point roadmap, engaging the oil-producing communities and sustaining the Amnesty Programme for the repentant militants.
Kachikwu added that President Buhari’s efforts to sustain the programme were being hampered by declining oil revenue, as the present administration only gets 55 per cent of the revenue that was available to previous administrations.
Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns
Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.
Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.
The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.
This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.
While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.
Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.
Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.
Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.
Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.
Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.
Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.
The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.
However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.
Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.
He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.
Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.
The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.
NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade
The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.
Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.
Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.
In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.
Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.
He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.
Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.
In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.
Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.
The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.
As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.
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