Prepare For Tough Times, Nigeria Will Be Out Of Business If Crude Oil Price Drops To $22 – NNPC Tells Nigerians

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Prepare For Tough Times Nigeria Will Be Out Of Business If Crude Oil Price Drops To $22 - NNPC Tells Nigerians

Mele Kyari who is the current Managing Director of the Nigerian National Petroleum Corporation (NNPC), has shown worry and has raised consciousness to Nigeria’s dilemma. He noted that the nation will be out of the oil and gas business due to the plunge in price as it drops to $22.

He has advised the nation to prepare for difficult times ahead, that even if the price of crude oil in the international market increases to $50 or more other than the current $30 per barrel. Mele Kyari gave this warning at a consultative roundtable organized by the Central Bank of Nigeria which went with the header: “Going for Growth 2.0” on Wednesday, March 11.

12 Liquefied Natural Gas (LNG) cargoes has been stranded globally due to lack of hubs because of the collapse in demand associated with the coronavirus.

Kyari said;

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“Today there are over 12 Liquefied Natural Gas (LNG) cargoes stranded globally because they have no hub because of the abrupt collapse in demand associated specifically with coronavirus. 

“It has also hit other sectors from the production stage which is the liquid crude. And as today with the Nigerian crude, we have 50 cargoes that have not found landing it means the traders have purchased it but they don’t know how to take it.

“While Nigeria’s oil producing competitors produce oil at a relatively cheaper cost, Nigeria’s production cost was still on the high side.

“Iraq dropped their price by $5 and Saudi Arabia by $8 in some locations. So, when your crude oil sells at $30 and you’re dropping it by $8, it means that in the market, you’re selling it at $22.”

“It’s a huge problem that can be accommodated in some production environment like in Saudi Arabia. Today, the best of our production system is $15-17 a barrel, there are many countries whose cost of production is $30 and we’re one of them. So, when the price now goes to $22 and we’re producing at $30, we’re out of business.”

“Currently, in our situation, we have expectations, we have plans. The belief is that we can take production to three million barrels per day and also shift our reserves from the current status of $37 billion to $40 billion in the next three years.”


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