- We’ll Stop Oil Production if Cost Remains High – Kachikwu
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said the country will have to halt oil production if the cost of producing the commodity remains stubbornly high.
Kachikwu stated this today in his address at the opening ceremony of the Nigeria Annual International Conference and Exhibition organised by the Society of Petroleum Engineers in Lagos.
He said the country was being left behind by its peers who had dramatically reduced their costs of production.
“When you look at the cost of production in Nigeria, it remains blatantly high. Our cost per barrel today is about $27 per barrel for JV (joint venture) fields. In Saudi Arabia, it is about $9. So we are way apart in terms of cost that anything that happens will hit us very hard,” Kachikwu said.
He said countries within the United Arab Emirates had cut costs very dramatically, describing them as the lowest-cost producers in the world.
The minister said, “Even though we have been singing over the last two years that we need to drive cost down, the current figure that I still have showing me the numbers of last year have not shown me a major dramatic reduction in the cost of production.”
He said they would compel a reduction in the cost because “there is no way this country will produce oil at this sort of swelling prices that we see; there will be no margins left for this country.”
According to Kachikwu, only oil companies who are able to drive down costs will have a footage in Nigeria.
He said, “For me, you rather leave the oil in the ground than produce at a cost that doesn’t make sense. So, cost is going to be a very high driver. So that is certainly one area we are focusing on; we are working collaboratively with oil companies.
“But let’s make no mistake about it: If we cannot negotiate it down, we will compel it or we will stop the production; it does not make any sense.”
Manufacturing Firms Borrowed N570bn from Banks in 2020 – CBN
Manufacturing firms borrowed a total of N570bn from Nigerian banks last year amid the economic fallout of the COVID-19 pandemic.
Banks’ credit to the manufacturing sector rose to N3.19tn as of December 2020 from N2.62tn at the end of 2019, according to the sectoral analysis of banks’ credit by the Central Bank of Nigeria.
The sector received the second biggest share of the credit from the banks after the oil and gas sector, which got N5.18tn as of December.
“The manufacturing sector, which is the engine of sustainable growth, is still struggling with the debilitating impact of the pandemic and is yet to recuperate,” the Director-General, Manufacturers Association of Nigeria, Mr Segun Ajayi-Kadir, said in January.
MAN, in a January report, revealed that most manufacturers said commercial banks’ lending rates were discouraging productivity in the sector.
The report said 71 per cent of Chief Executive Officers interviewed “disagreed that the rate at which commercial banks lend to manufacturers encourages productivity in the sector.”
It said the cost of borrowing in the country remained at double digits even amidst the reforms meant to culminate in lower rates to engender the country’s economic recovery process.
The report said, “Special single digit loans offered by development banks are still hard to leverage as conditionalities to assess the loans through commercial banks are often overwhelming and laden with additional charges that will eventually make the interest rate double digit.
“Seven per cent of respondents were, however, of the opinion that the rate at which commercial banks lend to manufacturers encourages productivity in the sector while the remaining 22 per cent were not sure of the impact of the rate of lending on productivity in the manufacturing sector.”
The report showed that 64 per cent of respondent disagreed that the size of commercial bank loan to manufacturing sector had encouraged manufacturing productivity.
It said the very high presence of the government in the money market, particularly through the sale of treasury bills, had been crowding out the private sector from the market.
Nigeria Earns Extra N318.4 Billion as Crude Oil Hits $67/Barrel
FG Generates Additional Income of N318.4 Billion as Crude Oil Hits $67/Barrel
The Federal Government earned an additional N318.36 billion in February following the surge in crude oil price above $60 per barrel.
Brent crude oil, against which Nigerian oil is priced, average $60 throughout the month of February.
In March, it rose to $67 per barrel.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, Nigeria’s crude oil price was retained at $40 per barrel for 2021.
However, she said the nation is presently producing below its 2.5 million barrel per day capacity at 1.7mbpd. This, she said includes 300,000bpd condensates.
“Although Nigeria’s total production capacity is 2.5mbpd, current crude production is about 1.7mbpd, including about 300,000bpd of condensates, which indicates compliance with OPEC quota,” the finance minister stated.
Going by the number, Nigeria is producing 1.4mbpd of crude oil without condensates, but with an additional $20 revenue when compared to the $40 per barrel benchmark for the year. It means the Federal Government realised an additional income of N318.360 billion or $20 X 1.4mbpd X 30days in the month of February.
Crude oil jumped to $68.54 per barrel on Friday following OPEC+’s decision to role-over production cuts.
Nigeria, Morocco sign MOUs on Hydrocarbons, Others
The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.
Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.
The statement said Nigeria would also produce ammonia and export to Morocco.
“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.
The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.
Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.
He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.
He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.
“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.
According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.
Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.
The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.
The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.
Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.
He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.
“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.
NSE to Mark 2021 International Women’s Day on Monday
AfDB Approves $400,000 Grant for Securities and Exchange Commission of Nigeria to Support Capital Markets Development
Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc
News3 weeks ago
Doctors Warn Covid Will Become Endemic and People Need to Learn to Live With it
Bitcoin3 weeks ago
Bitcoin Surges Above $50,000 Per Coin on Tuesday, Sets a New All-Time High
Bitcoin1 week ago
Bitcoin Rebounds To $50,881 Per Coin on Wednesday
News2 weeks ago
U.S. COVID-19 Deaths Hit 500,000
Economy3 weeks ago
Petrol Subsidy May Hit N11.2bn Per Week
Economy3 weeks ago
Petrol Landing Cost Rises to N180, Oil Crosses $60
Cryptocurrency4 weeks ago
Why CBN Bans Banks from Facilitating Cryptocurrency Exchanges
Banking Sector2 weeks ago
Banks Turning Female Marketers to Sexual Slaves – Senator