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NNPC projects $1tn loss in global oil production by December

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The Nigerian National Petroleum Corporation has estimated global losses from exploration and production activities due to slowing demand for crude oil amid the COVID-19 pandemic will hit about $1 trillion by the end of 2020.

Group Managing Director of the corporation, Mallam Mele Kyari, who stated this on Tuesday at the Nigerian Association of Petroleum Explorationists (NAPE) 2020 Conference, also reiterated the plan of the NNPC to reduce production cost per barrel to $10 by 2021.

The theme of the conference held in Lagos was “Accelerating Growth in Nigeria’s Hydrocarbon Reserves: Emerging Concepts, Challenges and Opportunities.”

He said the NNPC had slashed its cost per unit to between 20 per cent and 30 per cent and would reach the projected target next year.

He said, “We are in challenging times. What COVID-19 did to the oil industry is monumental. It has done a lot of collateral damage to the rest of the industry, entertainment and everything you can think off.

“Of course, the collateral cost to the industry we expect is about $1tn of loss for E&P across the globe.

“There’s an extreme decline in demand for oil and of course other losses through the year which is fatal for the business.

“But businesses must adjust and do things differently. We have pulled down cost and increased revenue and we are focusing more on reducing cost and optimising costs where we are not able to cut costs.

“We are investing in gas because we have seen the resilience of gas and that has taught us that gas will be the future of transition fuel and a great player in the future scenario. We are a gas country with over 600tcf with proven reserves of 203 trillion CF. We have done very little on that. The PIB will be the solution to this.”

Kyari said the only way to survive the difficult situation was to cut or optimise production costs and increase revenue.

Vice President, Prof. Yemi Osinbajo, who also attended the event, said the Federal Government was targeting the growth of the country’s crude oil reserves, currently at about 36 billion barrels to 40 billion and achieve a daily production of three million barrels.

Kyari, in his virtual presentation from Abuja, explained that with over 203 trillion cubic feet of gas, the Petroleum Industry Bill (PIB) when passed into law, would unlock the huge potential in the country.

According to him, without a clear fiscal environment and incentives in place, no one will invest in the sector, adding that by the time the PIB is ready next year, there will be renewed vigour in the industry, especially on the gas side.

He stated that despite the conversations surrounding the extinction of hydrocarbons, crude oil will continue to be relevant in the next 20 to 40 years.

He added that only very efficient companies producing at cheapest cost and getting to the market early would survive.

Kyari expressed delight at the discovery of oil in the frontier basin, particularly in the Benue trough.

He said it would significantly change the dynamics of production in the country, including the expansion of the country’s reserves.

He said, “Times are tough but the opportunities are all there. As a company, we have a target in the upstream and we know that $10 is possible in the industry. A lot is going on in terms of sharing resources, reducing contracting circle etc. We have seen a cost reduction of 20 to 30 per cent and overall at the end of 2021, we will see the $10 unit production cost.

“There are areas where it’s being done for less than $10 and unless we do this, we will not be competitive. The advantage we have is the quality of oil we have and we are one of the most extreme area in terms of distribution, so we have to pull the cost down, otherwise, we will produce oil and not find anyone to buy because you cannot cover the cost ultimately.”

Osinbajo, represented by the Minister of State, Petroleum, Chief Timipre Sylva, explained that though renewable energy remained the future of energy transition, hydrocarbons would remain the dominant source of energy in the immediate future.

He expressed optimism that a single-digit unit cost of production was achievable, provided the entire industry could work together to achieve the set target.

He said, “There’s no gainsaying that the growth of some countries depends on energy availability and utilisation, especially on crude oil and increasingly on natural gas.

“Renewable energy is becoming a cheaper form of energy and response to climate and reduced dependence on hydrocarbons over the next century seems to be inevitable. That notwithstanding, technology and discussions to date suggest that hydrocarbons will remain the dominant source of energy in the immediate future.

“The increased level of uncertainty in oil and gas demand and the emerging technologies on alternative energy have become important elements in making decisions on optimal exploitation of petroleum resources.

“This is more critical now that abundance of hydrocarbons is being discovered in the most unconventional places of the world. I suggest that our discussion should include but not limited to provision of secure energy supplies.”

The vice president stated that the OPEC production curtailments had resulted in lower revenue for the government, adding that it is now imperative for Nigeria to achieve a single-digit cost of production.

“Another key mandate is the growth of the country’s reserves to 40 billion barrels of crude oil as well as the production capacity of three million barrels of crude oil per day. We are fully committed to this mandate, notwithstanding the curtailment.

“We have the assurance that the curtailment will soon be over as the world economy improves. To grow our reserves, we have proposed fiscal incentives that will attract investments in the PIB,” he stated.

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Zamfara killings: Buhari says it’s time to crush bandits

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President Muhammadu Buhari was aghast by the latest orgy of violence visited on innocent people in Zamfara State by bandits and issued a fresh order to security agents to crush the gunmen.

More than 25 people were killed in attacks on Gobirawa, Rini, Gora, and Madoti Dankule in Bakura and Maradun LGAs in Zamfara — the death toll has since risen.

The gunmen were said to have invaded the communities on motorcycles and shot sporadically, on Wednesday.

Reacting, Buhari said the “insane and persistent violence against innocent people must stop”, adding that “such wanton disregard for life will be brought to an end sooner than later”.

A statement by presidential spokesman, Garba Shehu, on Thursday quoted Buhari to have said this, adding,“These criminals should stop pushing their luck too far by believing that the government lacks the capacity to crush them.

“The violence against poor villagers who are struggling with poverty and other severe economic challenges is not going to be tolerated by this administration.”

He directed security agencies to close all existing gaps in their operations while expressing hope that the special operation launched by security agencies will prove decisive in ridding the state of the “frequent and horrifying” bandit activities.

“Let’s not give these criminals any opportunity to succeed by taking the war to their own camps and stop them in their tracks before they even have the time to respond under our massive fire power,” the president added.

Buhari reassured residents of the state of his administration’s determination to defeat the enemies, despite the latest setback.

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MASSOB rejects UK asylum offer, says it’s plot against Biafra

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The Movement for the Actualisation of the Sovereign State of Biafra (MASSOB) has turned down the United Kingdom’s offer of asylum for its members.

It said the offer was an arrangement probably taken with President Muhammadu Buhari and the Federal Government to divert the attention of the people of Biafra.

A statement by MASSOB leader, Uchenna Madu, made available to journalists in Enugu, said the asylum offer was part of plans by the Buhari regime hatched with the British government against the emergence of Biafra.

The statement read in part, “The government of Britain is the sole architecture of the political, economic and religious problems of the people of Biafra in Nigeria even till today.

“It has not shown any remorse or apologise to the people of Biafra.

“Britain killed, maimed mesmerised and wounded our fathers, mothers and brethren through the Hausa Fulanis. MASSOB rejects their asylum gift.

“How can the chief persecutor of the people of Biafra suddenly turn to be our pacesetter? Britain and Nigeria can no longer deceive the world again concerning the plights of the people of Biafra.

“Our unified resilience, resolutions and unshakable spirit of no surrender will continue to hunt down this geographical expression called Nigeria.

“MASSOB demands referendum on Biafra not asylum.”

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Security: Avoid 14 Nigerian states, US warns citizens

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The United States has asked its citizens to stay away from 14 Nigerian states considered as hotspots of terrorism, banditry and kidnapping.

It stated this in its latest travel advisories even as it urged its citizens to “Reconsider travel to Nigeria”.

The US State Department in the updated advisory added at least 116 countries this week to its ‘Level Four: Do Not Travel’ list.

The UK, Canada, France, Israel, Mexico, Germany and others are on the list, citing a “very high level of COVID-19.”

Before Tuesday, the State Department listed 34 out of about 200 countries as “Do Not Travel.” The State Department now lists 150 countries at Level Four.

Nigeria is categorised as Level 3.

Unlike countries categorised as Level 4, based on the advice of the US Centers for Disease Control and Prevention, Nigeria has a good rating on COVID-19 prevalence.

“The Centers for Disease Control and Prevention (CDC) has issued a Level 1 Travel Health Notice for Nigeria due to COVID-19, indicating a low level of COVID-19 in the country”, the State Department said.

It listed areas American visitors should avoid, while in Nigeria as Borno, Yobe, and northern Adamawa states due to terrorism and kidnapping, Bauchi, Gombe, Kaduna, Kano, Katsina, and Zamfara states due to kidnapping.

It also banned American citizens from going to Coastal areas of Akwa Ibom, Bayelsa, Cross River, Delta, and Rivers states (with the exception of Port Harcourt) due to crime, kidnapping, and maritime crime.

In a country summary on Nigeria, the U.S. State Department wrote:

“Violent crime – such as armed robbery, assault, carjacking, kidnapping, hostage taking, banditry, and rape – is common throughout the country.

“Kidnappings for ransom occur frequently, often targeting dual national citizens who have returned to Nigeria for a visit, as well as U.S. citizens with perceived wealth. Kidnapping gangs have also stopped victims on interstate roads.

“Terrorists continue plotting and carrying out attacks in Nigeria, especially in the Northeast.

“Terrorists may attack with little or no warning, targeting shopping centers, malls, markets, hotels, places of worship, restaurants, bars, schools, government installations, transportation hubs, and other places where crowds gather. Terrorists are known to work with local gangs to expand their reach.

“There is civil unrest and low-level armed militancy in parts of Southern Nigeria, especially in the Niger Delta region. Armed criminality, including kidnapping and maritime crime, is also pervasive in this region.”

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