OpeOluwani Akintayo
Lagos — Timipre Sylva, Minister of State for Petroleum Resources has said President Buhari is passionate about boosting Nigeria’s crude oil production to meet the Organization of Petroleum Exporting Countries, OPEC quota of 1.753 million barrels per day (mb/d).
In a statement on Monday, the minister said necessary measures are being put in place to achieve increased production.
“You must have read the story of the military offensive in the Niger Delta. You also saw the efforts of the Federal Government, when the President mandated the Minister of State for Petroleum Resources, the Group Managing Director (GMD) of NNPC and other key stakeholders in the oil and gas sector to go to Niger Delta and do on-the-spot assessment in the region. It is a measure to shore up our product quota.
“You also saw that the minister has been relating with the international community to increase their investment in the oil and gas sector of the economy.
“If you aggregate all these, you will know that government is making efforts to make sure we are back to the peak of our production in the country.
“You know that the minister is very passionate about Nigeria benefiting from our natural resources. In the last few months, he has been in the vanguard for energy transition.
“He said we cannot just allow the international community to force us to abandon our natural resources because it is counter-productive for us.
“Are we going to get the resources to develop Africa? Where are we going to get the resources to develop Nigeria?
“So, he has been encouraging and pushing for a multi-track programme for the energy transition. It is also a way of encouraging energy investment.
“Two weeks ago, he met European Union (EU) ambassadors to Nigeria and the thrust of the discussion was to put more investment in hydrocarbons, especially gas, so that we can also be of help.
“At the moment, they are in a crisis in Europe. If they don’t put investment, how will Nigeria be able to invest?” he said.
OPEC had at its 27th OPEC and non-OPEC Ministerial Meeting held last Thursday, Nigeria’s crude oil production quota from the 1.735 million barrels per day target approved in April 2022 to 1.753 million barrels per day for May 2022.
Nigeria has been unable to meet its targets even before the raise.
“Following the conclusion of the 27th OPEC and non-OPEC Ministerial Meeting, held via video conference on March 31, 2022, it was noted that continuing oil market fundamentals and the consensus on the outlook pointed to a well-balanced market and that current volatility is not caused by fundamentals, but by ongoing geopolitical developments,” the organisation stated.
The development comes on the heels of a 7 million per day loss recorded by the Organization due to the Russian/Ukraine war.
Sanusi Barkindo, Secretary-General for OPEC had disclosed at the 61st meeting of the Joint Technical Committee, that the potential loss of Russian oil and other liquids exports (around seven percent of current global demand), either through sanctions or voluntary actions, is already having major repercussions on energy markets.
“No matter how you crunch the numbers, there is simply no way to make up for a loss in volumes of this magnitude given the current demand outlook,” he said.
He noted that the last major supply disruption of this size, 5.6 million barrels/day, occurred in 1978 and 1979 during the Iranian Revolution.
“At that time the spare production capacity was nine million barrels/day, nearly three times OPEC-10’s current levels of around 3.3 million barrels/day,” he said.
The OPEC scribe added, “Other gross peak supply losses during the last six decades were within the range of 1.5 to 4.3 mIllion barrels/day. During the Iran-Iraq war in 1980-1981, for instance, it reached 4.1 million barrels/day, and in 1990-1991, during the invasion of Kuwait, the loss amounted to 4.3 million barrels/day.”
Brent crude oil on Monday at 10:30AM Nigerian time slightly rose to $104.94 per barrel after a previous closing price of $104.75 amid concerns on a new spate of sanctions on Russia by the West. Brent hit the highest in 2022- $114/barrel in March.
Nigeria is a strong member of OPEC.
Barkindo said, “Today, we are also confronting a war in Ukraine whose far-reaching consequences could reshape the geopolitical landscape as well as world order itself.
“This conflict has also compounded the uncertainties related to the pandemic by stoking economic volatility and further elevating risk premiums for oil and other essential commodities, given that both Ukraine and the Russian federation are key global exporters, including of essential agricultural goods.
Barkindo told the meeting that the leading international organisations and institutions came together in the early days of the COVID-19 pandemic to endorse efforts to stabilise the energy markets.
“This high level of cooperation provided pivotal support to the collective efforts undertaken by our Declaration of Cooperation participating countries”, he said.
He urged global leaders to follow this example of multilateralism and once again ensure an unhindered, stable and secure flow of energy to the whole world.
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