Nigeria’s crude oil production hits 2.2mbpd By Roseline Okere

Kachikwu

Prices fluctuate to $37.57 per barrel
THE Federal Government has put the country’s
crude oil production for October at 2.2 million
barrels per day (mbpd). This represents an
increase of 4.16 per cent relative to August
output.
Besides, the price of Brent crude oil, the
international benchmark, fell by 88 cents at
$37.57 while West Texas Intermediate declined
by 0.8 per cent to $37.
Brent had earlier increased yesterday morning by
1.38 per cent to $38.45 and WTI by 2.78 per cent
to $37.35 before the current decline. The Federal
Government pegged crude oil benchmark at $38
per barrel in the 2016 budget proposal.
The oil price has been in recovery mode in recent
days. After hitting post-crisis low of close to $36 a
barrel on Monday, it has since rallied and at one
point yesterday, was back above $38 a barrel.
Nigeria, which had pegged crude oil benchmark
at $52 to run the 2015 budget, had difficulties in
meeting the financial needs in the country. The
country went further to cut the oil benchmark to
$38, but needs about $125 a barrel price to
effectively finance the 2016 budget.
This increase in production, which is still below
the country’s targeted 2.4 mbpd, came as world
oil prices hit their highest lowest level in 11
years.
Though, Nigeria has managed to meet its
Organisation of Petroleum Exporting Countries
(OPEC)’s quota of 2.2mbpd, the latest
development in the country is helping to boost
the global oil surplus, which experts believed
would persist at least until late 2016 as demand
growth slows.
Already, in November, about 10 November
cargoes were still not sold in addition to about 62
cargoes for December’s loading schedule.
Production from OPEC 12 members rose by
50,000 barrels a day to 31.73 million a day in
November, the highest in two months.
The Minister of State for Petroleum Resources, Dr.
Ibe Kachikwu, said during an interactive session
with members of the National Assembly in Abuja
in a presentation with the theme “The Roadmap
for Nigeria’s Oil and Gas Sector|”, that the
average national oil production as at July 2015
stood at 2.1 million barrels per day and the
Nigerian Petroleum Development Company
(NPDC) equity production is 99,000 barrels per
day.
According to him, the declining joint venture
reserves were due to inadequate and low
investment in the oil assets, stressing that the
issue of funding constraints must be addressed
going forward with the collaboration of private
and international investors.
He put the average gas-to-power generation at
about 3,000 megawatts and domestic gas supply
of one billion standard cubic feet (scf) with the
contribution of 600 million standard cubic feet
from NPDC.
On the current state of the refineries, Kachikwu
stated that from the available reports before him,
two of the refineries may be re-streamed before
the end of December, 2015 adding that efforts
were on to engage private investors to build new
refineries within the old ones, to enable the
facilities to share power, pipelines and other
resources.
He stressed that the new agenda for the oil and
gas industry was centered on having the right
people, doing the right things, at the right time,
for the right purpose to yield the right results.
Kachikwu stated that the petroleum sector on his
watch would ensure that the Nigeria content
policy would transform the oil and gas industry
into the economic engine for job creation and
national growth.
Kachikwu said he was obliged to cancel the
Offshore Processing Agreements (OPAs), crude-
for-products-exchange arrangement (popularly
known swap) and other unprofitable product and
crude arrangements all in a bid to avoid rent-
seekers and add value to the Nigerian
hydrocarbon resources.
On the downstream sector, Kachikwu advocates
the introduction of a private sector model that
would reinvigorate the efficient supply and
distribution of petroleum products especially in
the area of pipeline assets.
He said the menace of pipeline vandalism had led
to huge losses of crude and petroleum products,
adding that 27, 967 incidents of pipeline
vandalism were recorded in the last few years.
He noted that unutilised pipelines and poor
pipeline integrity also led to high cost of trucking
and impact on the roads.