• Saturday, April 13, 2024
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Crude shortfall rids Nigeria of price gains

Oil steamrolling to $100 a barrel but Nigeria missing at the party

Nigeria has remained far from reaping the benefits of the high oil prices in the international market, as its production falls below the quota set by the Organization of Petroleum Exporting Countries (OPEC).

Oil prices had reached above $105 a barrel as at last Thursday, being the first time since 2014.

Commenting on the oil price increase recently, the minister of state for petroleum, Timipre Sylva, regrets that Nigeria is not able to take advantage of the high prices due to production shortfalls.

According to Sylva, being a net importer of refined petroleum products places Nigeria at a difficult position to enjoy the benefits of the oil price.

He said, “Rise in crude oil prices is not something to celebrate. In Nigeria, right now we are a net importer of petroleum products and when the price of crude oil goes up it affects the prices of petroleum products.

“So, for us who are the net importers, it is not very good. What we are saying is that if you are going to produce more and you get more dollars from your production, then it gives you more money for your imports.

“But if you are now producing less and then you still have to make sure that the Nigerian market is supplied fully with petroleum products, then you will see that there will be a shortfall.

“We are not happy at all that we are not able to take advantage of the high prices of oil that we have seen today. So, it is our loss. But we are doing everything to ensure that we are able to bring back our production and meet our OPEC quota.”

Nigeria’s monthly crude oil production stayed low in the year 2021, below 1.86mb/d projection as production for the months January, February, March and April were 1.58mb/d, 1.62mb/d, 1.65mb/d, 1.63mb/d.

Data from the OPEC monthly oil market report show that Nigeria produced 1.41mb/d, 1.39mb/d, 1.38mb/d, 1.27mb/d and in the months of May, June, July, August and September 2021, respectively, which falls below 1.54mb/d OPEC production quota.

The minister noted that local production was beginning to climb up gradually, adding that Nigeria may completely regain production to meet OPEC quota before the end of 2022.

Speaking on the Nigeria International Energy Summit (NIES), which is expected to take place from February 27 to March 3, 2022 in Abuja, Sylva noted that there had been great outcomes from previous summits that have been embraced by governments, policy makers and the industry as a whole.

According to him, the conversation around Nigeria’s Decade of Gas initiative, exit of government from Joint Venture cash call funding emanated from previous summits.

“Other programmes from previous summits include; the push to diversify Nigeria’s economy and drive industrialization through focus on domestic utilization of natural gas, which culminated to the declaration of 2020 as the year of natural gas for Nigeria.

“After several years of planning, the National Gas Transportation Network Code (NGTNC) was finally launched at this summit.

“The United States Trade Development Agency (USTDA) signed a phenomenal deal to finance the development of 1.35 megawatts power plant here in Abuja with the Nigerian National Petroleum Corporation (NNPC) at the summit,” he said.

He further noted that key international and indigenous companies like Shell Petroleum and Development Company Limited, Total Exploration and Production, Nigeria Liquefied Natural Gas (NLNG) Limited, Dangote Refinery, Waltersmith Petroman and a host of others used the summit platform for special presentations to drive their aspirations and launch major projects.

Read also: Naira slips while OPEC currencies jump

“With the theme of the summit, “Revitalizing the Industry: Future Fuels and Energy Transition”, our objective is to drive a new narrative and make energy transition the cornerstone of the country’s industry policy.

“The objective of the summit from inception is to deliver the biggest and best African Petroleum Technology and Business Conference that will be the definitive platform, not just for Nigeria, but also for Africa to engage the global energy community. I believe that we have delivered on that with every edition.

“Some of our confirmed international guests include The Honourable Minister of Energy, Kingdom of Saudi Arabia, Abdulaziz bin Salman Al Saud, who will be represented by Nasser AlDossary.

“Others are Tom Alweendo, Minister of Mines and Energy, Namibia, H.E Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea and H.E Aime Ngoy Mukena, Minister of Hydrocarbons, Democratic Republic of Congo. The global energy leader and the Secretary General of Organization of Petroleum Exporting Countries (OPEC), Mohammad Sanusi Barkindo has also confirmed his attendance,” he said.