The Nigerian National Petroleum Corporation (NNPC) yesterday raised the alarm about the looming crisis as a result of low oil prices and asked Nigerians to brace up for tougher times ahead.
The warning came as the coronavirus scourge continues to wreak serious havoc in the global economic landscape, especially by creating fiscal and planning distortions in crude oil and gas-exporting economies. The Group Managing Director of the state-owned oil corporation, Mallam Mele Kyari, who gave this hint yesterday at the Roundtable Parley with the CBN Governor, Mr. Godwin Emefiele with the theme “Going for Growth 2.0” in Abuja, specifically advised millions of Nigerians to “prepare for trouble” as oil prices take further plunge while demands continue to ebb by the day.
Kyari’s alarm could not have come at a more auspicious time in the 2020 fiscal year in view of the foreign exchange earning implications of the coronavirus scourge for the country’s budget implementation and expected outcomes for the citizenry. Kyari said, “The potential of coming out of the coronavirus will be a long while to come, at least three months.
So, prepare for trouble for three months…We have a backlog of production that needs to be resolved. We will have the impact of coronavirus for a while. Kyari said, “Today, I can share with you that there are over 12 stranded LNG cargoes in the market globally. It has never happened before. LNG cargoes that are stranded with no hope of being purchased because there is an abrupt collapse in demand associated with the outbreak of coronavirus. “Today, we have about 50 oil cargoes that have not found landing.
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It means that the traders have purchased it but they don’t know where to take it to.” The NNPC GMD said in order to remain afloat amidst the ravaging effects of the coronavirus, some oil producing countries like Saudi Arabia had given a discount of $8 on the price of its crude oil. “Iraq gives $5 to their off-takers in some locations,” he said. He said when crude oil is sold at $30 per barrel, countries like Saudi Arabia gives it at $22 per barrel and Iraq sells it at $25 per barrel.
Kyari, however, said the NNPC was not resting on its oars, saying several measures were being taken to alleviate the cost of crude oil production in Nigeria. He said the cost of crude oil production in Nigeria is within the range of $15 to $17 per barrel, adding that a reduced cost of production would create a market for Nigeria’s crude and make the country a choice destination for foreign direct investment.
NAN
