Nigeria appears to be the least prepared among OPEC countries to take advantage of a higher oil price regime, should prospects for the global market continue to improve as has been the case in the last three weeks, analysts say.

Blighted by consistent policy failure on the part of government, and the resultant drying up of investment into the oil sector for several years, crude oil production in Nigeria is falling at a time that production is being ramped up by its peers, BusinessDay findings show.

“We are not well prepared, too many interests at microscopic levels. We also have an uphill challenge to convince the international oil companies who are owed billions of dollars in cash call, to trust us enough to invest in the midstream and downstream sectors,” says Ibilola Amao, managing director of Lonadek Consulting.

Nigeria’s crude oil production has remained stuck below budget levels yearly and at the current rate of 1.6m barrels per day, output has fallen from 1.75m in March, with the global oil consulting firm Wood Mackenzie forecasting that production by Africa’s largest producer will average 1.5m per day for the next decade on failed policies.

The forecast comes on a day the global price for Brent crude rose to $45.90 per barrel, as expanding fires in Canada, the world’s fourth largest producer, knocked out about 1m bbl/day of production, according to Goldman Sachs.

While production is being crimped in Nigeria, Saudi Arabia is making the required investment to take output close to record highs in the coming weeks to meet summer demand for power, industry sources say.

While Saudi production has remained steady at about 10.15m bbl/day, ongoing push should see that level rise to 10.5m barrels in the summer months.

The bullish kingdom is now able to lessen discount by 65c/bbl for June sales of Arab light to Asia, according to estimates by Bloomberg.

Reports from Iraq said the war ravaged country is currently exporting an average of 3.43m bbl/day, up from the level of 3.286m in April.

Industry sources say Iraq is pushing ahead with its oil production growth strategy.

In Iran, exports to South Korea have more than quadrupled to 400,000 barrels a day since the international sanctions were lifted in January.

Iran, which seeks $11bn in overseas investment to build three oil refineries, has set an oil output target of 4m barrels per day by March 2017, barely a year after returning from international sanctions which crippled its production infrastructure.

The surge in Iran’s oil sale to South Korea will severely dent the appeal of Nigeria’s oil in Asia, according to analysts.

On the back of the vast improvement in output, Iran now says it may be getting to the point where it is willing to do a deal on capping production.

According to a report by Goldman Sachs Mexico continues to pump out 2.2m bbl/day while also seeking developers to participate in its second power auction which will be held in the third quarter of this year.

In Kuwait, a fellow OPEC country, where the 2016/17 budget is based on an oil price of $25 per barrel, oil production has been ramped back up to 3m bbl/day, following disruptions by a workers strike.

Other reports say Russia oil exports surged in April to just under 5.8m bbl/day, the highest level since at least 2008, as energy customers both from the East and West crave its crude.

A review of the global oil market shows that beyond Canada, the current production disruption follows a long list of production issues globally, including pipeline attacks in Kurdistan, Nigeria, Libya, Colombia; heavy North Sea and Murban maintenance as well as the Kuwait strike.

Even before the Canada fire, these recurring disruptions have steadily displaced between 0.5 and 1.0 mb/d of production since mid-March.

With the ongoing strength in Chinese crude imports, weekly assessments of ex. US oil inventories (Europe, Japan and Singapore) also show draws of 1.6 mb so far in April vs. seasonal builds of 11 mb, which have helped the recovery in oil prices and the strengthening of crude time spreads. Importantly, the impact on the global balance has in large part been offset by the surprisingly large increase in Iran exports of 600 kb/d since early March, with Southern Iraqi exports also reaching a record high in April, up 200 kb/d from March (both heavy crude).

Further, while the disruptions are recurring and have reached their highest level since 2014, they remain transient in nature and create the risk that crude production rises sequentially, especially if OPEC production continues to surprise to the upside.

On the back of these developments, Goldman Sachs now believes that the ongoing large disruptions are helping improve crude oil fundamentals but the key to sustainable further recovery in oil prices continues to be longer lasting decline in non-OPEC production.

Source: https://businessdayonline.com/2016/05/nigeria-least-prepared-in-opec-for-higher-oil-price-regime/

Buhari is a certified failure!!! that is what you get when you foist an illiterate on a country as leader

Nigeria would always do things haphazardly the period of low prices should have been one where we develop the many oil and gas projects that were stalled down south while waiting for a pick up in prices, the country has had the potential to do 4million bbls a day but what have you, a government searching for oil in the desert.

Good idea? Yes
Right timing? Hell No!

Imagine Iran, post sanction already gunning for 3.8 million bbls per day. Nigeria is still playing politics with the economy, legislations everything about this country almost sucks.

I think it's time we started teaching everyone "sustainability", the concept of living for the next generation because obviously this country has no plans for even the next year.
How can 170 million people be living in the moment.

All Buhari cares now is how to grant amnesty to these bastards?, dis country sef

Buhari is only interested in war
he has no interest in the economy

LRNZH:
The preparation not done during high oil prices will reflect in low oil price period.

The IOCs are owed plenty money from the active productive period during high oil prices. Diezani's NNPC refused to.oay them. Today the FG is broke and can't even pay those debts. How do you convince the IOCs to pour more money into exploration or new field development? PIB, we cannot pass through the legislature for over years.

I hate to blame GEJ but honestly his administration f*cked Nigeria up.

Buhari has been presidiot for 1 year now.Enough of your stupid blame on GEJ

wowmenow:
Buhari is only interested in war
he has no interest in the economy

Hello are u serious about helping me? Sorry I asked cos people have been trolling me

LRNZH:
The preparation not done during high oil prices will reflect in low oil price period.

The IOCs are owed plenty money from the active productive period during high oil prices. Diezani's NNPC refused to.oay them. Today the FG is broke and can't even pay those debts. How do you convince the IOCs to pour more money into exploration or new field development? PIB, we cannot pass through the legislature for over years.

I hate to blame GEJ but honestly his administration f*cked Nigeria up.

And exploration in the North east at a time like this should be priority innit?

cktheluckyman:

Buhari has been presidiot for 1 year now.Enough of your stupid blame on GEJ

And how about selling you to pay up this debt below left by your hero who was presidiot for 5 years yet couldn't pay even with selling crude above $100/barrel?

http://www.dailytrust.com.ng/news/business/experts-multibillion-dollar-cash-call-debts-leaves-nnpc-broke/131792.html

In fact, we have buhari and kachikwu to thank for sustaining the little activity going on by paying up cash call obligations they met from your much beloved 5 year presidiot.

NavierStokes:


And exploration in the North east at a time like this should be priority innit?

Except you wish to be mischievous, exploration in the northeast didn't start last year. It was very much on during the regime of GEJ.

Buhari has a chance to stop it but pls stop making it look like that is the reason for our non preparation.

If the past regime had been faithful to its obligations with respect to JV cash calls during the time of plenty, the IOC's will be ready to fund new operations.

theV0ice:


Except you wish to be mischievous, exploration in the northeast didn't start last year. It was very much on during the regime of GEJ.

Buhari has a chance to stop it but pls stop making it look like that is the reason for our non preparation.

If the past regime had been faithful to its obligations with respect to JV cash calls during the time of plenty, the IOC's will be ready to fund new operations.

There lies the answer, This period is supposed to be a time of rounding up with several projects in the development phase that had been stalled, there is no action taken so far by this administration that gives an indication of preparations for tomorrow.
Oil prices will rise, the driving season is almost here upon us, and Nigeri will export 1.5million barrels a day. Keep absolving this administration oranyone before or after it.

I am pointing out a failure of our leadership and of course the average supporter will make it a battle of current vs previous administration.

cktheluckyman:
Buhari is a certified failure!!! that is what you get when you foist an illiterate on a country as leader

see painment, take some pain killer before ur madness wil start, God bless pmb as ipod are been mad everyday

NavierStokes:


There lies the answer, This period is supposed to be a time of rounding up with several projects in the development phase that had been stalled, there is no action taken so far by this administration that gives an indication of preparations for tomorrow.
Oil prices will rise, the driving season is almost here upon us, and Nigeri will export 1.5million barrels a day. Keep absolving this administration oranyone before or after it.

I am pointing out a failure of our leadership and of course the average supporter will make it a battle of current vs previous administration.

You're always quick to jump on the blame game without as much as pointing out a reason why we got into the hole in the first place. The govt doesn't do the spending. There's a joint venture and every honest child knows the IOC's who operate this industry have had enough with the Nigerian govt with respect to dishonesty, debts etc.

To think that GEJ could arm twist PDP chieftains to get 2nd term yet couldn't do same to get PIB passed for his 5 year rule is almost unforgivable. The IOC's WILL NOT COMMIT MORE RESOURCES WITHOUT THE PIB and the buhari admin is already treating it with the urgency it deserves.

Where will the money for new investments come from if not the IOC's? How will they invest without the policy document called PIB?

But have you ever being honest enough to acknowledge that this govt is at least making some progress with respect to the same PIB? In fact, have you ever thanked buhari and kachikwu for reducing the cash call obligations they inherited from GEJ despite selling crude for far less than GEJ sold?

Those up there blaming Buhari are systematically high on osogbo weeds. What was our rewards when crude oil was selling at over 100 dollars. Nothing to show for it. They embezzled everything. So this is no news at all cos we the masses have being at lost for many years. Buhari should continue with his work. We are behind him

Buhari was a very huge mistake we made!

Too bad.

They will always have something bad to say about us...... We're ready for anything




God bless Nigeria

There is no denying the above. Investment in oil has been at an all time low. This, coupled with the activities of militants, has made the oil business a scary one. But then, higher oil prices have never resulted in a better existence for the man in the street. We need to look away from oil and make science and technology along with manufacturing the bedrock of our economy.

always same trash talk every time nothing changes. we are never really for anything.

ok

NavierStokes:
Nigeria would always do things haphazardly the period of low prices should have been one where we develop the many oil and gas projects that were stalled down south while waiting for a pick up in prices, the country has had the potential to do 4million bbls a day but what have you, a government searching for oil in the desert.

Good idea? Yes
Right timing? Hell No!

Imagine Iran, post sanction already gunning for 3.8 million bbls per day. Nigeria is still playing politics with the economy, legislations everything about this country almost sucks.

I think it's time we started teaching everyone "sustainability", the concept of living for the next generation because obviously this country has no plans for even the next year.
How can 170 million people be living in the moment.

my bro I just tire....can you just imagine?
a country of dunderheads ruled by bigger dunderheads...

cktheluckyman:
Buhari is a certified failure!!! that is what you get when you foist an illiterate on a country as leader

Eediot.


So Buhari was there when the price was high.

You are suffering from chronic eediocy.

When the 'clueless one' was busy spending excess crude oil funds. You people said it is the pressure from the Governors.

To think you expected us to continue with that kind of leader is quite amazing.

theV0ice:


You're always quick to jump on the blame without as much as pointing out a reason why we got into the hole in the first place. The govt doesn't do the spending. There's a joint venture and every honest child knows the IOC's who operate this industry have had enough with the Nigerian govt with respect to dishonesty, debts etc.

To think that GEJ could arm twist PDP chieftains to get 2nd term yet couldn't do same to get PIB passed for his 5 year rule is almost unforgivable. The IOC's WILL BIT COMMIT MORE RESOURCES WITHOUT THE PIB and the buhari admin is already treating it with the urgency it deserves.

Where will the money for new investments come from if not the IOC's? How will they invest without the policy document called PIB?

But have you ever being honest enough to acknowledge that this govt is at least making some progress with respect to the same PIB?

I wouldn't want to list the number of projects that had been stalled because the govt, says no money.
My question is what has the government done to address these issues since they got on board. What policies, what guidelines what actions have they taken so far?
So if the previous administration per se has a "shortcoming", then was this government planning on coming to sit foldhands and watch? Or she rolls her sleeves and gets to work.
How long has it taken Iran to ramp up production post sanctions, and with no external help?

IOCs not bringing money is not an excuse, Jonathan is not an excuse, it is PMB's watch and I don't have to look too far to know where the buck stops.

NavierStokes:


I wouldn't want to list the number of projects that had been stalled because the govt, says no money.
My question is what has the government done to address these issues since they got on board. What policies, what guidelines what actions have they taken so far?
So if the previous administration per se has a "shortcoming", then was this government planning on coming to sit foldhands and watch? Or she rolls her sleeves and gets to work.
How long has it taken Iran to ramp up production post sanctions, and with no external help?

IOCs not bringing money is not an excuse, Jonathan is not an excuse, it is PMB's watch and I don't have to look too far to know where the buck stops.

The only magic to get the IOC's to open their vaults is the PIB and I expect you to admit this govt is giving it more serious attention than all the previous admins put together.

PMB, Osinbajo and Kachikwu are pursuing the reforms in the oil industry with speed and it even resulted in getting funds of about $1.2B to fund new JV projects recently.

http://thebusinessdispatch.com/nnpc-secures-1-2b-funding-for-36-jv-oil-wells-with-chevron/

Try and acknowledge this my friend. You won't die if you do.

989900:
You can't keep encouraging fraudulent ways and people, and pipeline and oil installation vandals and still want productivity sustained at the same time -- you can't!

WHO IS SUPPOSED TO SECURE THE PIPELINES? BUHARI IS A CERTIFIED FAILURE!!! EVEN A DAY OLD BABY KNOWS THAT

cktheluckyman:

WHO IS SUPPOSED TO SECURE THE PIPELINES? BUHARI IS A CERTIFIED FAILURE!!! EVEN A DAY OLD BABY KNOWS THAT

While GEJ was and still is a certified and laminated failure. Even an unborn child knows that