Nigeria has about 50 cargoes of crude oil that have not found off-takers for them for now due to the drop in demand and the effects of the Coronavirus pandemic, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said.
Kyari told the Central Bank of Nigeria Round Table discussion in Abuja on Wednesday that “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 abrupt collapse in demand associated with the outbreak of coronavirus.”
Speaking on the domestic level, Kyari disclosed that the NNPC is ready to strategically put in place measures that will reduce the cost of crude oil production in Nigeria to create market for Nigerian crude and make the country a choice destination for Foreign Direct Investment.
“At the moment the cost of crude oil production in Nigeria is within the range of $15 to $17 per barrel and that some leaders in the Industry such as Saudi Arabia’s cost of production is between $4 and $5 per barrel,” he said.
He noted that due to the uncertainties of the global crude oil market, countries that produce at the cheapest price would remain in the market, while jurisdiction with high cost of crude oil production would not be able to cope with the competing prices.
Kyari explained that in the face of the Coronavirus global pandemic, countries like Saudi Arabia have given discount of $8 and Iraq $5 to their off-takers in some locations and that when crude oil sells at $30 per barrel, countries like Saudi Arabia is selling at $22 per barrel and Iraq selling their crude at $25 per barrel.
He said the NNPC was working round the clock to increase the country’s daily production to 3 million barrels per day and shore up the crude oil reserves to 40 billion barrels.
Kyari called on governments at all levels, captains of Industries and the organized private sectors to brace up for the new low regime of global crude oil prices and that realistic estimates must be made to reflect the current realities of the crude oil market.
GIK/APA