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Kachikwu: Transparency Index in Oil Sector Still Low Despite Reforms



Emmanuel Ibe Kachikwu
  • Kachikwu: Transparency Index in Oil Sector Still Low Despite Reforms

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said the country’s oil industry is still lacking in sufficient transparency and trust.

Kachikwu, in a monthly podcast he shared on his social media feeds, and obtained yesterday in Abuja, said despite efforts initiated by the government since 2015 to clean up the industry, transparency index still remains low and trust deficit still very high.

He said going forward, his ministry would focus its energy on improving the industry’s transparency and trust indices, adding that Nigerians had the right to know every details of the industry’s operations.

According to him: “Transparency and trust are going to be key. We have done a lot in terms of trying to bring transparency to the industry: we have done monthly reports, we have done processes, we have reviewed time, we have opened up the industry, but the transparency index still remains low.

“The trust deficit still remains very high, people still do not trust the oil sector, they still do not trust the NNPC, they still do not trust the DPR, and they still do not trust anybody in the oil sector despite all that we have done.”

Speaking on plans to improve the industry’s transparency level, he said: “We have got to ask ourselves: how do we work with those oversight teams, the likes of NEITI, global bodies to work out a process where they can review what we do and get a benchmark where we will be happy.

“Make no mistake about it, Nigerians are entitled to feel the way they do, they are entitled to ask questions, this is their resources, it doesn’t belong to those of us in the ministry. We must be able to look to data, we must be able to do pure analytical appraisals and arrive at a conclusion that is accurate, and at least access what we do in a way that is honest, as opposed to fictional.”

The minister also disclosed in the podcast which focused on his two-year at the helm of the oil sector that the government would step up its oil search not minding the challenges therein.

He said the federal government would remain bullish and not likely to slow down on its search for more oil deposits in the country despite existent challenges militating against this effort.

Kachikwu explained that Nigeria was encouraged to adopt this position by the exploits of the Americans with Shale oil.

In addition to exploring for oil in established areas with hydrocarbon potentials like the Lake Chad Basin and Benue Trough, Kachikwu said the government would further its search for oil in other parts of Nigeria with such potentials.

“We have investments that we are looking at in the Benue Trough and Chad zone. It is absolutely important that just like changing the foothold on refining is going to be key for us in stopping (petrol) importation by 2019, investments in the Lake Chad Basin and Benue Trough are going to be key.

“Every part of Nigeria that has a potential for oil, we will find, if America can find oil out of Shale, Nigeria must find oil wherever it resides in Nigeria,” said Kachikwu.

An attack in July of a team of oil explorers from the Nigerian National Petroleum Corporation (NNPC), University of Maiduguri and joint security personnel who were undertaking seismic data studies at the Lake Chad Basin, had impacted Nigeria’s oil search in the basin after President Muhammadu Buhari, asked the NNPC to resume its oil search.

Similarly, commercial oil finds in neighbouring Chad had encouraged the NNPC to go back there in November 2016 when it resumed exploration activities in Gubio; Magumeri; Monguno; Kukawa; Abadam; Guzamala; and Mobar, after getting security advice from the military.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend




Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.


  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return



Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather




Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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