Nigeria’s crude oil, which has been struggling to sell in recent months, may suffer further setbacks in the global market following the lifting of the ban on the United States oil exports.
The US Congress had on Friday approved the lifting of the ban as part of a $1.1tn spending bill, which included a provision that would allow the export of US crude for the first time in more than 40 years. The bill was later signed by President Barack Obama.
Nigeria recently lost its biggest customer, the US, which now buys only a small amount of Nigerian crude oil due to the dramatic rise in domestic shale production.
The growth in US light sweet crude oil production has resulted in a sizable decline in the country’s imports of crude grades of similar quality, such as Nigeria’s.
The sustained decline in crude oil prices since June 2014 has exacerbated the dwindling fortunes of the Nigerian crude, with the nation’s crude differentials trading at a 10-year low.
A lot of Nigerian crude is said to be currently floating on ships with a significant amount finding home in storage tanks rather than in refineries as a result of the supply glut in the global market, which is dominated by largely by light sweet crudes.
The Chairman and Chief Executive Officer, International Energy Services Limited, Dr. Diran Fawibe, in a telephone interview with our correspondent, said OPEC member countries would have to brace for more competition from the US, adding that the lifting of the ban would make the international market very dynamic.
Fawibe, who was a general marketing manager responsible for selling Nigerian crude oil in the world market at the NNPC, said, ”US crude may have to compete with Nigerian crude in some markets. That is the direct effect, but it depends on the volume the US will be able to export.
“The immediate effect may not be substantial. The lifting of the ban is strategic and shows the direction the US is moving in terms of oil and gas policy. It can be used also to modulate the flow of oil to different markets.”
He said the volume that the US could add to the market would not be much, adding that Iran could bring substantial volume to the market.
Crude oil exports account for over 90 per cent of Nigeria’s exports and remain the key source of foreign currencies.
The Project Director for the Uquo gas field development, a joint venture project by Frontier Oil Limited and Seven Energy, Alhaji Abdullahi Bukar, said, “There will be more competition. Without expansion and growth, the demand will not increase to absorb this extra amount.
“So we’d better be ready to diversify our economy. It will have an impact on Nigeria’s oil exports because some of the people that are buying from Nigeria now may decide to go and buy US crude if the terms are better.
“We have to be very competitive in order to make the terms under which we sell our oil attractive. That means you have to look at your price and your delivery conditions and your terms
Noting that the US lifting of export ban would impact on the market, the Director, Emerald Energy Institute, University of Port Harcourt, Prof. Wumi Iledare, said Nigeria would now be more serious, adding, “Nigeria cannot continue to depend on the price of oil, the quality of oil sold abroad and the exchange rate to build its budget.

www.punchng.com/nigerias-oil-faces-competition-as-us-begins-export/

Diversification remains the answer! #goingbacktothefarm

Whatever!!!

We as a Nation can not and will not starve!

We need to gather our asses together and explore a new path. #AgricultureIsTheAnswer

Good, let's produce the one we will use and then look for other products to export.

AroOkigbo:
Diversification remains the answer!
#goingbacktothefarm

Diversification you say? Well Bubu isn't ready for that. He's still searching for more oil. He has allocated about N34billion for the oil exploration in the Chad basin in NE Nigeria.

double wahala for dead body.

[quote author=Candyrain post=41203929][/quote]

That's why he's a ddullard.
I fainted when I saw the news
Push that amount towards agriculture and see the result in coming years
Than to go to a desert and war zone to look for crude.

Codedb2:

That's why he's a ddullard.
I fainted when I saw the news
Push that amount towards agriculture and see the result in coming years
Than to go to a desert and war zone to look for crude.

It's a pathetic situation indeed. Nations are gradually moving away from the use of fossil energy to renewable energy but dear Bubu is hell bent on looking for more crude oil. Well perhaps it's to make the north happy and that they also will now be called an oil producing region.

Candyrain:


Diversification you say? Well Bubu isn't ready for that. He's still searching for more oil. He has allocated about N34billion for the oil exploration in the Chad basin in NE Nigeria.

Are you kidding me.. Did buhari allocate such amount To oil Exploration? To find more oil?

Am beginning to suspect this administration to promoting Northern project

Lifting 40years ban! US is definitely up to something. Is either Obama want to run down US after allowing the coming of Muslim/Arabian refuge which is foreign to America policy or he wants ground Russian and Africa oil dependent economy.
this is because nobody will sell shares when it is at the bottom but will wait for it to gain a little.
Somebody would say may be it is because the price is dropping every day. I would say if the US wants to arm twist OPEC to keep the prices afloat, it is a simple thing since most of the members are their allies.

Princemilla:


Are you kidding me.. Did buhari allocate such amount To oil Exploration? To find more oil?

Am beginning to suspect this administration to promoting Northern project

Of course. It's in the news. Nations are moving towards the use of renewable energy but Bubu is hell bent trying to make sure that north is also called an oil producing region.

It is either some of you are confirmed buffoons or YOUR IQs operate below average. Exploring for crude in the Chad Basin will further position the country to solve its fuel problems. Why? Once oil is discovered, it would serve as Primary feed stock to the Kaduna Refinery. This would greatly reduce oil theft usually experienced when crude is pumped from the SS to the Refinery.

Secondly, Nigeria is blessed with huge untapped gas deposits. An exploration would help determine the amount of gas in the Basin, lead to new power plants there and ultimately stimulate the Northern economy.