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Nigeria to Reduce Crude Oil Production Cost to $10 Per Barrel

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Mele Kyari

NNPC to Reduce Cost of Crude Oil Production to $10 Per Barrel

Mallam Mele Kyari, the Group Managing Director, the Nigerian National Petroleum Corporation (NNPC), has said the corporation is working on lowering crude oil cost of production from $17 per barrel to about $10 per barrel.

Kyari disclosed this at Seplat Energy Summit 2020, titled “The Impact of Global Energy Transition on African Economies” held on Thursday.

He said “We are making efforts to drive down the cost of crude oil production to $10 per barrel. We are doing that mindful that it doesn’t stifle investments or hamper the growth of local content and capacity.”

Nigeria’s high cost of production compared to other oil-producing countries like Saudi Arabia and Iraq that are producing at around $5 to $6 per barrel has rendered the demand for the nation’s oil uncompetitive in recent months following over 60 percent decline in global oil prices.

The high cost of production continues to hurt Nigeria’s revenue generation and ability to service its growing debt, especially with crude oil now trading between $40 and $43 per barrel.

Experts have said Nigeria must broaden its revenue generation by taking advantage of its vast gas resources and improve tax collection efficiency.

Kyari said “Aside driving down the cost of production, we are also focusing on gas development. We have huge gas resources which can be harnessed to power industries and engender development.”

“It is very important that we have connectivity in Africa in terms of economic activities and oil and gas infrastructure. That is why we are working hard to have the Trans African Gas Pipeline and to expand the West African Gas Pipeline.”

Other speakers at the summit were Mr. Mike Sangster, MD, TOTAL E&P Nigeria; Mrs. Audrey Joe- Ezigbo, President, Nigerian Gas Association, and Mr. Roger Brown, Seplat CEO Designate.

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

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Economy

Oil Marketers: Panic Buying Ahead of Possible Increase in Pump Price

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petrol

Oil Marketers in Panic Buying  Mood Ahead of Possible Increase in Pump Price

A new finding has shown that filling station owners are presently in panic buying mood ahead of a perceived increase in pumping price of petrol in August.

Petroleum Products Pricing Regulatory Agency during the weekend said pumping price could rise due to the surge in oil prices in recent weeks.

According to experts, pumping price could hit 150 per litre this month, especially after comments from the president of the agency validated that possibility.

Billy Gillis-Harry, the National President, Petroleum Products Retail Outlets Owners Association of Nigeria, said “There is panic buying and it is because of the worry that prices will be reviewed either downwards or upwards. But because of the marginal rise in crude oil prices, the calculation is that petrol price could go up.”

He added, “That is the situation and this was why we requested that there should be a stakeholders’ engagement every month or quarterly so that we can be sure of what to expect.”

He, however, said a lot of marketers have said they are not going to hike price immediately, particularly if there was an increase in the price of petrol in the month of August.

The PETROAN president said, “Many of our members have been buying products since (July) 22nd and now they have products lined up, hoping that if PPPRA increases price, they will manage the cost in a way that Nigerians will know that we are not out to profiteer.

“We are out there to give service. So if we got products at this current rate of about N143 and they are ready to shoot the price up to N155, which is what is being anticipated, we will still sell at N143.”

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Economy

NNPC Refutes Samano Sa De CV Theft Claim, Says no 48m Barrels Missing

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NNPC

NNPC Says no 48m Barrels Missing, Called Samano Sa De CV Blackmailer

Following Samano Sa De CV publication that 48 million barrels of crude oil valued at an estimated $2.06 billion was illegally moved in 2015 from the country to China and eventually sold despite the company informing the then Chief of staff to the President, Abba Kyari, the Group Managing Director, NNPC, Mele Kyari and other top government officials. The Nigerian National Petroleum Corporation (NNPC) has now denied any knowledge of such theft.

In a letter signed by Mr Kehinde Ogunwumiju (SAN), NNPC’s lawyer from Afe Babalola & Co., and addressed to Samano Sa De CV’s counsel, Mr Gboyega Oyewole (SAN), Ogunwumiju claimed that the letter sent to the corporation was “not only unfounded but frivolous”.

He described the whole whistleblowing of Samano Sa De CV as “a gold-digging scheme” aimed at “blackmailing and extorting money from our client and the Federal Government of Nigeria”.

The NNPC’s lawyer stated, “We wish to emphatically and unequivocally state for the record that our client vehemently denies your client’s claim that it provided any information to NNPC or the Federal Government of Nigeria which information led to the identification and/or recovery of 48 million barrels of stolen Nigerian Bonny Light Crude Oil stored in the People’s Republic of China.

“Accordingly, it is our client’s position that your client is not entitled to the payment of five per cent of the value of the allegedly stolen crude or any amount whatsoever as compensation for information it purportedly gave to the Federal Government of Nigeria in respect of the said stolen crude stored in the People’s Republic of China.”

He also stated that “it was impossible to ship 48 million barrels of crude oil from Nigeria to China without any record or trace of same” especially because, “as of 2015, the daily production of crude ml in Nigeria was below 1.6 million barrels.”

Ogunwumiju added, “Therefore, 48 million barrels of crude oil would have been the total production capacity of the whole country for a month.

“It is simply impossible that one-month crude oil production would disappear without any record or trace.”

According to him, notwithstanding the firm’s failure to provide evidence to support its claims, “relevant officials of the government were mandated to proceed to China to verify the claims of the existence of the said stolen Nigerian crude oil.”

He stated, “The said delegation discovered that the Samao’s claim was false and baseless. Consequently, the government severed communications with the syndicate.

“Miffed by this, Messrs Ramirez and Jose Salazar Tinajero, acting as agents of Samao, resorted to blackmail and intimidation of key officials of the government and the NNPC, threatening to make public information that the said 48 million barrels of oil had been recovered, sold and the proceeds therefrom, looted by some government officials and the NNPC when it was aware that this was untrue.

“They also demanded $125,000,000 from the said government officials, which was conveniently and rightfully ignored.

“Thereafter, NNPC reported this case of attempted blackmail to the Department of State Services and the Nigeria Police Force.”

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Economy

US Economy Contracts by 32.9% in Q2 2020 as COVID-19 Halts Activity

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US economy contracts by 32.9 percent

US GDP Contracts by 32.9% as COVID-19 Halts Activity

The US, the world’s largest economy, contracted by 32.9 percent year-on-year in the quarter ended June 2020 as COVID-19 pandemic grounded business operations and other economic activities.

According to the Bureau of Economic Analysis, the figure is by far the worst reading on record.

On a quarterly basis, the economy contracted by 9.5 percent as consumer spending that supports two-thirds of the American economy nosedived due to COVID-19 lockdown and general disruption in economic activities during the quarter.

This was because of the decline in household incomes and surged in the unemployment rate during the period under review.

“This is something we have never seen before,” said Jason Reed, assistant chair of finance at the University of Notre Dame. “At first I felt it was like a natural disaster that had hit the entire country at the same time. Now it is evolving into something worse than that.”

On Wednesday, Jerome Powell, Federal Reserve Chair, said the second wave of COVID-19 has started weighing on the economy, adding that a recovery cannot be sustained unless the virus is under control.

Similarly, the Bureau of Labor Statistics on Thursday said 1.4 million Americans filed for jobless claims last week, indicating that projected recovery is stalling.

“We’re still digging out of a hole, a really deep hole,” said Ben Herzon, executive director of IHS Markit. “The second-quarter figure will just tell us the size of the hole we’re digging out of, and it’s a big one.”

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