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Tag: Oil Production

  • Nigeria’s oil production drops to 1.4m bpd

    Nigeria’s oil production drops to 1.4m bpd

    The Minister of State for Petroleum Resources, Timipre Sylva, on Monday urged Nigerians to show understanding on the recent increase in the pump price of petrol from N148 to N151.56.

    He said the nation’s crude oil production has drop from 2m barrels per day (bpd) to 1.412m bpd.

    He said before COVID-19, oil prices were in the territory of over $60 per barrel but they have fallen to more, than $45 per barrel.

    He admitted that Nigeria was going through a crisis and it was time to adjust.

    Sylva, who spoke at a joint briefing with the Minister of Information and Culture, Alh. Lai Mohammed and the Minister of Power, Mr. Saleh Mamman in Abuja, said successive governments had tried to handle the removal of subsidy without success.

    He said the removal of subsidy was done in national interest.

    He said: “At this stage we are here for a very specific reason to explain why the pump prices are going up.

    “Please let us be realistic as Nigerians. If you have a situation where you have lost 60 per cent of your national income due to no fault of yours, because in the whole world nobody prepared for COVID-19.

    “COVID-19 happened and immediately eroded demand for our most important product, which is crude oil.

    “Demand for crude oil completely dropped because all countries in the world were on lockdown at the same time.

    “I mean, that is very easy for all of us to understand. If every country was on lockdown then, no country was really functioning at the time. So there was no demand for crude oil.

    “All the refineries were shut down. The price of crude oil, of course dropped to zero level. In some countries, it even dropped to the negative territory.

    “That means we were even paying people to come and take crude oil so that, at least, you can continue to produce. In that kind of situation, its earnings dropped drastically as a country.

    “Now, we had to adjust our production because OPEC said the only way to shore up crude oil prices was to cut production and we cut down our production to 1.412m bpd.

    “You know that this country has been producing two million barrels per day (2mbpd) for a long time.

    “If you drop that production to as low as 1.412mbpd, it becomes a big drop and of course, the prices still did not go up to where we expected the prices to be.

    “Before the COVID-19, prices were in the territory of over $60 per barrel. Today, in spite of all the cut, we have not been able to achieve more than $45 per barrel.”

    Sylva said since there was a crisis at hand, the Federal Government wants Nigerians to show some understanding.

    He added: “So, you can see that there is a crisis here. How do we adjust our situation? One of the problems successive governments have been trying to handle is this issue of subsidy.

    “If every government has been trying to achieve this, then, you know that it is in the national interest for us to achieve it. At one point, we must achieve it.

    “We have got to that point now and we call for understanding so that as a country, all of us should hold hands together and ensure that we achieve this policy direction because it is in the best interest of the life of the economy and all of us in the long run.”

  • Nigeria to witness economic crisis, high fiscal deficits over decision to reduce daily oil production – Fitch

    Nigeria’s decision to take off 417,000 barrels per day from its crude oil production quota will lead to deeper economic contraction and higher fiscal deficits, says Fitch Ratings.

    The rating agency also added that the decision will further compound pressures on the country’s external finances resulting from the slump in oil prices, the nation’s main source of foreign earnings.

    In a statement released on Monday, the credit rating company noted that Nigeria’s adherence to oil production cuts under the agreement signed in April by members of the Organisation of the Petroleum Exporting Countries and their allies (OPEC+) will affect growth and external finances this year.

    “We assume that Nigeria will comply fully with the production caps under the OPEC+ agreement, and have reduced our forecast oil output to 1.88 million barrels per day (mbpd, including condensates) in 2020 and 1.87 mbpd in 2021, compared with our earlier forecast of 2.1 mbpd for both years,” it said.

    The agency also added that it had adjusted Nigeria’s gross domestic product forecast for the year, expecting a slump of 3 percent which should recover in 2021.

    “We have adjusted our GDP forecasts, and now expect Nigeria’s economy to contract by 3 percent in 2020, before a recovery to 3 percent growth in 2021,” it stated.

    Fitch said that it expects Nigeria’s increased recourse to concessional multilateral loans to ease near-term liquidity pressures, but the risk of a disruptive macroeconomic adjustment will persist.

    Nigeria had requested for loans from the World Bank, the International Monetary Fund, and the African Development Bank amounting to $5.4 billion.

    It said that despite the OPEC+ deal, its oil price forecasts remain unchanged, at $35 per barrel for Brent on average in 2020 and projected a $45 per barrel increase in 2021.

    Fitch said that Nigeria’s foreign-currency reserves had dropped by $5 billion over the first four months of the year despite only limited depreciation in the Naira’s key exchange rates.

    It said, “This reflects moves by the CBN to tighten foreign-currency access. This has contained capital outflows temporarily, although the build-up of pent-up foreign-currency demand may increase the risk of a disruptive future exchange-rate adjustment.

    “We expect outflows to materialise later in the year, which, alongside a significant current-account deficit and continued CBN resistance to overhauling the exchange-rate framework, will drive a fall in international reserves from $38.6 billion at end-2019 to $23.3 billion at end-2020.”

    It further said the contraction in exports and remittance inflows means the current account will remain in deficit, despite a sharp drop in imports.

    “We project the current account, which had been in surplus for much of the last 20 years, to record a deficit equivalent to 3.8 percent of GDP in 2020 and 2.5 percent in 2021.

    “External liquidity pressures will be aggravated by outflows of foreign portfolio investment.” It stated.

    Fitch highlighted an intensification of external liquidity pressures as a negative rating sensitivity when it downgraded Nigeria’s sovereign rating in April, to ‘B’ with a Negative Outlook from ‘B+’ with a Negative Outlook.

    Nevertheless, greater recourse to multilateral borrowing will help to ease the strain Nigeria faces on this front which according to Fitch, if secured, would cover around 21 percent of the general government deficit in 2020.

  • Nigeria to Raise Oil Production to 2.5mbpd from April 1

    Nigeria to Raise Oil Production to 2.5mbpd from April 1

    Following the inability of Organisation of the Petroleum Exporting Countries (OPEC) to extend its present oil output cut, which expires on March 31, 2020, Nigeria will from April 1, 2020 increase its production by 500,000 barrels per day from its current 1.7 million barrels per day.

    Nigeria is hoping to increase the daily production of crude and a light oil called condensate to 2.5 million barrels per day from the stipulated 2.2 million currently.

    This was disclosed by the Minister of State for Petroleum Resources, Mr Timipre Sylva, in a recent interview with Bloomberg.

    Recently, the national oil company, Nigerian National Petroleum Corporation (NNPC), reduced the official selling price of the country’s crude oil to record lows in order to find buyers for unsold April-loading cargoes before announcing its May programmes.

    Recall that prices of the country’s crude grades, Bonny Light and Qua Iboe, were cut by $5 per barrel to allow for more buyers.

    This is happening because oil prices are tanking globally due to a Saudi Arabia and Russia row over failure to agree to a proposed production cut during the OPEC+ meeting held earlier this month.

    The proposal had been offered to stifle falling oil prices affected by the COVID-19 outbreak but the failure led Saudi Arabia to increase production and unleash cheap oil to the global market, leaving countries to fight for market share.

    From April 1, Nigeria will join Saudi Arabia, Russia, United Arab Emirates, Iran, and major producers in increasing its production, adding to the oil glut.

    With drop in demand due to travel restrictions placed by governments to combat the spread, less demand means more cheap oil in storage, and with higher production from next month even these storage are under threat of been filled up.

    Speaking further in light of the oil price war between the OPEC de-facto leader and Russia, Mr Sylva said it was necessary to stabilise the market.

    “It’s in our interests, collective interests, to ensure that we are able to stabilize the market.

    “We are taking a very close look at all the production streams,” he added. “Anyone which is not producing profitably will be shut down,” he said.

  • Attack: Full oil production resumes month end – Saudi Arabia

    Attack: Full oil production resumes month end – Saudi Arabia

    Saudi Arabia’s energy minister Abdulaziz bin Salman said that half of the crude oil production that was disrupted due to the weekend attack on Aramco’s oil facilities had been restored.

    Salman made this known at a news conference on Tuesday.

    “Over the past two days, we were able to contain the damage and restore more than half of the production that was disrupted due to the terrorist attack,” he said.

    He added that Aramco will fulfill all its commitments towards its clients this month through withdrawing from its stocks of crude oil.

    He expected that the production capacity will return to 11 million barrels per day by the end of September and to 12 million barrels by the end of November.

    “Not a single shipment to an international customer has been or will be missed or canceled as a result of these attacks,” Aramco’s CEO Amin Nasser told journalists in Jeddah.

    Drone attacks at the weekend targeted two facilities operated by Saudi state oil giant Aramco in the eastern province of Buqyaq, forcing the kingdom to halt about half its oil supplies afterwards.

    Earlier in the day, Saudi Arabia’s King Salman bin Abdelaziz said that the kingdom is able to deal with the consequences of the “cowardly attacks” that targeted the Saudi oil facilities.

    In a cabinet meeting, the king said the attacks not only target the kingdom’s vital facilities, but also the global oil supply and the stability of the world economy.

    The “kingdom will defend its lands and vital facilities, and is able to respond to such acts whatever their source is,” said the cabinet.

    Oil prices were sent soaring following the attacks, which were claimed by Houthi rebel fighters in Yemen who are backed by Iran.

  • Nigeria to cut oil production by 100% compliance with OPEC deal in October – Sylva

    The Minister of State for Petroleum, Timipre Sylva on Thursday said that Nigeria has agreed to cut oil production by complying with OPEC deal 50% this month and 100 percent in October this year.

    A statement of the Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu disclosed that.

    It quoted the minister as saying “We have agreed to comply with production cuts of 50% this month (September 2019) and 100% from October this year.”

    The statement noted that Sylva made the commitment at 16th Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi, United Arab Emirates on Thursday.

    According to the statement, OPEC commended Nigeria’s unwavering commitment to the stability of the global oil market which spanned many years of its membership of the organization.

    This commendation came from the Chairman of OPEC’s 16th JMMC, Prince Abdulaziz Bin Salman.

    Bin Salman, who doubles as the Saudi Arabian Energy Minister noted that since the 1980s when Nigeria’s late Oil Minister Dr. Rilwanu Lukman reigned at the helm of the Organisation, the West African nation’s role has been very pivotal in helping OPEC achieve stability in the oil market.

    “Nigeria has always brought commitment and obligation towards the OPEC cause. I always thought of how we would have crossed the uncertainties of the global oil market of the 1980s without Nigeria,” Bin Salman added.

    According to him, Nigeria’s role cuts across compliance with OPEC charters as well as mediation and reconciliation among member countries over the years.

    During Thursday’s JMMC, OPEC reiterated its determination to accelerate concerted action towards addressing market challenges and adapting to future developments.

    While enjoining non-compliant members to fully observe their production commitments, the JMMC also underscored the need for continued commitment for the Declaration of Cooperation (DoC) in support of oil market stability on a sustainable basis.

    Earlier in his remarks, Sylva said OPEC’s endorsement was a testimony to Mr. President’s efforts at ensuring that Nigeria remains a stabilizing force within the organization.

    “The rest of OPEC have always looked up to us whenever there are problems. Recall that as OPEC Secretary General, our late Oil Minister Dr. Rilwanu Lukman was highly influential and since then we have played a central role and have been taken very seriously by member countries,” he stated.

    Sylva, who was in his maiden outing at the OPEC described the endorsement as “heartwarming”, adding that it would go a long way to spurring and encouraging the country to do better.

    The next meeting of the JMMC comes up on the 4th December 2019 at the OPEC Secretariat in Vienna, Austria.

  • Nigeria daily oil production hits 2.3mbpd – Baru

    Nigeria daily oil production hits 2.3mbpd – Baru

    The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru says the country’s daily oil production is currently 2.32million barrel pre day.

    Baru disclosed this on Tuesday when a delegation of the Nigerian Union of Journalists (NUJ) led by its President Mr Chris Isiguzo visited his office in Abuja.

    “Since we came in July 2016, we are focused on increasing production of oil and gas and condensates.

    “At some point, our national combined production was about a million barrels; I am happy that as at the end of 2018, we have moved on averaging last year, about 2.1 million barrels.

    “As I am speaking, this morning, I look at our production figures, combined oil and condensates we are pushing 2.32 million barrels a day,” he said.

    According to him, the stability and ability to push production has come as a consequence of several factors, both internally, externally and also with the help of the media.

    Commenting on the gas sector, he said that the corporation had also pushed from a low level of about 450 million standard cubic feet per day for the domestic alone and currently hovering at about 1.5 billion SCF per day of gas.

    He noted that Internally, it’s subsidiary, the Nigerian Petroleum Development Company (NPDC), had pushed their production on the equity side, from a low figure of 65,000 barrels per day in 2016 to over 166,000 barrels per day equity.

    ” Overall production of the NPDC, we are able to maintain it at close to 300,000 barrels per day. It is quite a significant boost,” he added.

    The GMD further said that NPDC, had become the main supplier for gas for the power sector, supplying over 800 million SCF per day required to boost the production of power in the country.

    ” Currently, the power that we enjoy has about 80 per cent input from gas-driven thermal power plants.

    “Our drive for transparency has also produced a lot of fruits. We have been able to attract Foreign Direct Investments (FDI), into the oil and gas industry, and in 2017 alone, we have attracted about 3.6 billion dollars.

    “In 2018, we have shot up by three billion dollars, at the moment, some of our officers are in London, where they are negotiating about seven billion dollars as FDI for the oil and gas sector.

    “In terms of crude oil cost of production, it has significantly improved from the 27 dollars per barrel in our Joint Venture operations, and it has come down to 22 dollars per barrel.

    “We are looking for further reduction this year, to about 20dollars per barrel,” he added.

    On Exploration, he noted that at the Kolmani River prospect in the Gongola basin, the corporation targeted for the well to be done in 60 days, but because of the interest, “we are doing intensive testing and we still have not hit the Total Depth (TD).

    “We think maybe by next week, we will be able to hit the TD of 14,250 feet. The TD is not sacrosanct. If we find that there are interesting signs beyond the TD, the rig has a capability of 20,000 feet.

    “There are interesting things we are doing, all these to increase the reserves of the nation. This, we are doing assiduously,” he said

    On the refineries, he said that the contractors were still on site with the review for effective evaluation, adding that the corporation expected that by October it would be concluded and it would move to look for financiers.

    He urged the media to continue to support efforts that would help to protect oil infrastructure in the country.

    Earlier, Isiguzo commended Baru on the transparency and efficiency in the management of the affair of the corporation.
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    He appealed to the security agencies, host communities and traditional rulers to support NNPC’s effort to protect the oil pipelines and infrastructure across the country.

    He said that the union would partner with the corporation and continue to carry out its roles for the growth and development of the sector.

    “We are committed to go beyond unionism to make impact in the society, which is our primary role and we have started that with the launch of our magazine ‘The NUJ Defender’.

    “We believe that our collaboration NNPC will continue to help the sector and the country at large,” he said.