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Nairaland Forum / Nairaland / General / Politics / Why Buhari Should Not Borrow Next Year (2804 Views)
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Re: Why Buhari Should Not Borrow Next Year by NavierStokes(m): 9:52am On Dec 25, 2015 |
EternalTruths: You have a point bro, because the calculations should be based on accrued revenue and not net ( following deductions of production costs) because if the analysis has to be done along Jokay07's line of reasoning, total average cost of production for Nigeria is in the region of 31 dollars a barrel, 15 dollars as cost of production and 16 dollars of operational expenses. So his calculation should have been done using 7 dollars and not 20 dollars as he has shown. 2 Likes 1 Share |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 9:54am On Dec 25, 2015 |
AZeD1: What I am asking him to do is to back that figure with fact base on a reliable source. The real production cost could be $5 or more or less No problem Just back your figure with fact base on a reliable source. I will accept defeat if he can provide fact base on a reliable source. |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 9:57am On Dec 25, 2015 |
NavierStokes: Thank you Let someone post a link to a reliable source that will tell us the real production cost of oil. |
Re: Why Buhari Should Not Borrow Next Year by NavierStokes(m): 10:02am On Dec 25, 2015 |
EternalTruths: Currently looking for one I had from last month splitting the costs by production and operating expenses and ranked by countries. Found: http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL |
Re: Why Buhari Should Not Borrow Next Year by NavierStokes(m): 10:10am On Dec 25, 2015 |
EternalTruths: I still haven't found the table I was referring to, but herr below is Lai Mohammed and ACN cum APC's cost per barrel put at $35. https://www.nairaland.com/1206359/economy-brink-collapse-acn-warns But I still repeat that when operating expenses are factored in then the costs average 31 dollars a barrel. |
Re: Why Buhari Should Not Borrow Next Year by AZeD1(m): 10:10am On Dec 25, 2015 |
EternalTruths:He said onshore can be as low as $10 while offshore can be as high as $25. The $18 he used was an average. |
Re: Why Buhari Should Not Borrow Next Year by GiantParrot(m): 10:12am On Dec 25, 2015 |
Jokay07: Nice analysis. However, I get this nagging feeling that you worked towards the N830b without necessarily believing in the truth of what you wrote. Pardon my scepticism, but I have in my experience seen situations where even accomplished scientists tailor evidence to suit their aims. I may be very wrong here though. But here are the reasons for my suspicions: 1. You seem to be calculating profits (38-20) instead of oil revenue, When we are clearly dealing with revenues. 2. Average cost of production in Nigeria was about 31.6 USD from a CNN report released in November. http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL This is not surprising considering the costs incurred on security, unplanned shutdowns due to vandalism, and corruption in operating the producing assets. Can you provide a link that says it's 20 USD? 3. While it is true that government owns about 60% of JVs, you intentionally omitted the petroleum profit tax paid by other members of the JVs. Doesn't that also qualify as oil revenues? How about the petroleum profit tax from the PSAs. I do not know how N820 billion was arrived at. I will love to see a credible analysis explaining that sum. 2 Likes |
Re: Why Buhari Should Not Borrow Next Year by Jokay07(m): 10:15am On Dec 25, 2015 |
EternalTruths:you could have used the google on your phone to browse and make researches about onshore and offshore activities in the oil and gas sector before you open a thread to spill the puss of your ignorance and illiteracy!! Take care, kid!! |
Re: Why Buhari Should Not Borrow Next Year by Jokay07(m): 10:17am On Dec 25, 2015 |
What is so complicated in that simple and little analysis? Truly we need to revamp our education sector. |
Re: Why Buhari Should Not Borrow Next Year by NavierStokes(m): 10:30am On Dec 25, 2015 |
http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL The link I was looking for. 1 Like 1 Share |
Re: Why Buhari Should Not Borrow Next Year by GiantParrot(m): 10:31am On Dec 25, 2015 |
@ Jokay07 On my point 3, after taking a second look at your post, I see you actually addressed it. It is very surprising to me that government would claim that petroleum profit tax is non oil revenue. I can't see how that makes sense. I'd love to be enlightened on the rationale behind that. Saying other non oil companies pay tax is not a logical justification for why petroleum profit tax should be classified as non oil revenue. I'm sure that's self evident. 1 Like |
Re: Why Buhari Should Not Borrow Next Year by NavierStokes(m): 10:32am On Dec 25, 2015 |
GiantParrot: Excellent write up brother, a bottle of red wine for your Christmas meal, from me to you. |
Re: Why Buhari Should Not Borrow Next Year by Ebukaobi: 10:50am On Dec 25, 2015 |
Eledan: That guy has over 10 monikers on NL Jobless IPOB youth And as always, they are all illiterates |
Re: Why Buhari Should Not Borrow Next Year by kayfra: 11:06am On Dec 25, 2015 |
Let me "borrow" your wisdom. Make a really bad situation terrible just to test the performance of his cabinet. Then borrow 7 times what you initially wanted to borrow to right the error? And you know fully well, the borrowing isn't a one time thing. |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 11:32am On Dec 25, 2015 |
Jokay07: You lost I caught you off guard Next time think before you attack You want to defend a government without fact You think we are all illiterates. |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 11:40am On Dec 25, 2015 |
NavierStokes: Thanks for the link. So I wonder where he got his figure from |
Re: Why Buhari Should Not Borrow Next Year by baralatie(m): 12:15pm On Dec 25, 2015 |
Jokay07:They are challenging the authenticity that 820 is the accrued revenue from oil as claimed by PMB This is a different thing altogether 1 Like |
Re: Why Buhari Should Not Borrow Next Year by baralatie(m): 12:20pm On Dec 25, 2015 |
EternalTruths:If it is $31 per barrel Nigeria must borrow! |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 12:24pm On Dec 25, 2015 |
baralatie: Certainly But you know NNPC is full of lies secrecy and fraud. |
Re: Why Buhari Should Not Borrow Next Year by Jokay07(m): 12:29pm On Dec 25, 2015 |
GiantParrot:that could better explained under the tax system but i fink it's becauce the revenue is not generated from direct sales of crude oil |
Re: Why Buhari Should Not Borrow Next Year by Bizibi(m): 12:43pm On Dec 25, 2015 |
EternalTruths:yes,true federalism....if that is not practiced in this nation then we will keep wasting our time 1 Like |
Re: Why Buhari Should Not Borrow Next Year by Jokay07(m): 12:46pm On Dec 25, 2015 |
baralatie: The mistake I made was to reply him. I thought my explanation would unyork his foolishness and open his eyes but I later see that No amount of tutelages can turn loose someone who derives pleasure from orchestrating ignorance at all axes. Is it not funny to see some clowns challenging the structure and accuracy of a National budgets prepared by Ministry of Budget and National planning whic was presented openly not only to the senates but to the whole world to see and assess? tell me, is it not funny? If the president has the stealing our national money, will he do that by inflating figures in the National budget which he would himself present to the whole Nigerians and the media to see? Only Ethernatruth believes that the President wants to steal our money by inflating figures in the budget- what a resounding stupidity cum ignorance. Like I said, the kid needs to go back to school and resist for Waec. Even my cousin in Secondary school was laughing when I showed him what that dummy posted on Nairaland. I REST MY CASE!! 2 Likes |
Re: Why Buhari Should Not Borrow Next Year by HEIR: 12:57pm On Dec 25, 2015 |
Funny thread indeed. tuale4u gave this whole analysis in some other thread. Which was a very good job but missed out on some things. These are my little additions though. 1. Production cost to produce one barrel was about $18. So the new $31 is still quite arguable even if u mention vandalism and other security concerns. Shale guys produce at about $38 per barrIel(so won't break even if they start exporting). Countries like in the middle east as low as $10 per barrel, so would still break even if crude falls to $20 per barrel. 2. The production cost is shared by the FG and operators 60:40. Just like the profit. 3. Operational cost dropped in the last one year as NAPIMS direct all operator to reflect this in all their expenditure. NAPIMS and DPR check each ticket to ensure strict compliance. Also expect further drop this year. The reason for job cuts and all 4. Lets not stop here, lets take it to the national assembly if the correct figures are not reflected. Merry Christmas |
Re: Why Buhari Should Not Borrow Next Year by baralatie(m): 1:57pm On Dec 25, 2015 |
EternalTruths:Nnpc inability to sustain its four refineries in 80% capacity,yes but to inflate crude oil sales.I doubt |
Re: Why Buhari Should Not Borrow Next Year by Jokay07(m): 2:06pm On Dec 25, 2015 |
I have tried my possible best to enlighten some people here, I gave them an opportunity to sip from the fountain of knowledge but they refused. But If you still think that the President is planning to steal our money by inflating some figures and miscalculation in the National Budget he presented openly to the Senate, entire Nigeria and to the whole world which everybody saw it both in home and abroad, in Apc, Pdp and even Kowa party - then feel free to go to the media and announce it and challenge it, in fact I ready to donate any amount of money to get it published and broadcasted in the media. If you think that those who calculated the National Budget made some mistake by miscalculating our oil revenue money then please 'pm' / contact me @ 'jokay07@yahoo.com' cus I am ready to do everything humanly possible to get it broadcasted on the media. THANKs!!! |
Re: Why Buhari Should Not Borrow Next Year by baralatie(m): 2:28pm On Dec 25, 2015 |
Jokay07:Naaa It is all the part of the power behind naira land politics.it has its roots in challenging virtually the statements from our political elites. For example! We where working with a $10 fee and $25 offshore but what do we have a source with a figure $31. If I know naira land that figure would be haunted to death but because of chanters....! Again the budget has its own "gbege" The fig by PMB states"#3.8 trillion as revenue and 2.2 trillion as deficient(covered as loan) to form a #6.08 budget but what is on ground is "#3.78trillion revenue and #1.84 loan component totalling #5.62trio as budget". I am just watching the whole scenario though. 1 Like |
Re: Why Buhari Should Not Borrow Next Year by wirinet(m): 2:37pm On Dec 25, 2015 |
NavierStokes:You links states that production cost for Nigeria is $31.60 while that of UK is $52.5 . Does it make sense that production cost of the UK is higher than the current market price of Brent crude, which is $37.89 per barrel. So how come the UK is selling at a loss of $15 per barrel? Are you insinuating that Nigeria and the oil companies presently share a profit of less than $10 per barrel? During the 80s, crude hardly broke the $30 barrier, at on time it went as low as $8, so why were oil companies still in business? |
Re: Why Buhari Should Not Borrow Next Year by NavierStokes(m): 3:05pm On Dec 25, 2015 |
wirinet: Ha ha ha ha ha Little wonder people believe just about any info thrown out there such as "a million barrels of crude stolen per day etc.". I recall our petroleum Economics professor from the Colorado School of Mines saying even the best guys who do the oil and gas calculations most times are intrigued the way the numbers work. Production cost of oil my brother, comprises of the OPEX and the CAPEX, the CAPEX of today has already been invested years ago and that investment has been spread over time. That is the reason why at a time like this in high cost countries, most oil companies cut back on making investments but rather chose to lift oil from the ground, because for the period the direct cost incurred will be the opex ( cost of administration, salaries and lifting oil from the ground and sending to the terminals) but the CAPEX not to be neglected. Let me shock you with info from a discussion I had with someone years ago, someone high up one of the major oil producers in Nigeria: "for every $100 dollars of sales our company makes, we get $3 out of it, I don't understand how we manage to make money but we do make money" and no IOC makes more than this company in Nigeria. You should be able to figure out. In summary the oil and gas business is one where the numbers can sometimes be seen to appear like magic, reality and appearance are intertwined in this world. 1 Like 1 Share |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 3:21pm On Dec 25, 2015 |
NavierStokes: Very very very true. |
Re: Why Buhari Should Not Borrow Next Year by EternalTruths: 3:26pm On Dec 25, 2015 |
baralatie: Thanks Don't mind the guy He thinks he can come online to quote imaginary figures without fact to back up his $18 production cost and expect people like us to clap for him. Imagine that it took a link from navierstokes to bring him down from his high horse. People defending the indefensible. |
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