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.
Just in: No bail for Nnamdi Kanu, says court
A federal high in Abuja has refused to grant bail to Nnamdi Kanu, leader of the Indigenous People of Biafra (IPOB).
Kanu was re-arraigned on an amended 15-count charge bordering on treasonable felony.
However, on April 8, Binta Nyako, the judge, struck out eight out of the 15-count charge.
While counts 6,7,9,10,11,12,13 and 14 were struck out, the defendant is to stand trial on counts 1,2,3,4,5,8 and 15.
Kanu’s lead counsel, Mike Ozekhome, moved an application for bail.
Ozekhome said, “Until a person is tried and convicted, he should be allowed to walk free.”
He reminded the court that a defendant ought to enjoy the presumption of innocence until proven guilty.
He begged the court to consider the deteriorating health condition of the defendant.
Ruling on the bail application on Wednesday, the judge held that “the application is premature and refused with liberty to refile and reapply.”
Fed Govt puts Facebook under watch over IPOB
FACEBOOK and other social media platforms have been cautioned against yielding their platforms to the members of the Indigenous People of Biafra (IPOB) to incite violence and instigate ethnic hatred in Nigeria.
The Federal Government gave the instruction through Information, Culture & Tourism Minister Lai Mohammed at a meeting with a team from Facebook.
Mohammed was quoted as saying: “I have called this meeting to enable us to discuss the increasing use of Facebook by separatists and anarchists, especially those of them based outside the country, to instigate violence and ethnic hatred in Nigeria.
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Ex-EFCC chair Magu promoted to AIG before retirement
The Police Service Commission has confirmed the promotion of a former acting chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, to the position of assistant inspector-general of police (AIG).
Spokesperson for the PSC, Ikechukwu Ani, announced this in a statement issued on Monday.
“The eight Commissioners of Police promoted to AIGs were; CP Mustafa Magu Ibrahim who is the most senior in the CP cadre and who missed the last two promotions after returning to the Police; Abraham Egong Ayim; Okunlola Kola Kamaldeen; Andrew Amieengheme; Akeera Mohammed Younous; Celestine Amechi Elumelu; Ngozi Vivian Onadeko and Danladi Bitrus Lalas (Airwing),” the statement reads.
The development comes amid Magu’s expected retirement from the Nigeria Police Force, having clocked the mandatory retirement age of 60 on May 5.
In July 2020, when Magu was still at the helm of affairs in the EFCC, he was arrested, detained, and suspended as the acting chairman of the anti-graft agency — after he appeared before a panel probing allegations of gross misconduct
The panel, led by Justice Ayo Salami, subsequently recommended Magu’s removal as EFCC boss “for failing to properly account for N431,000,000.00 security votes/information fund released to the office of the Executive Chairman of EFCC between November 2015 and May 2020”.
The panel further recommended that Magu should be referred to the inspector-general of police (IGP) for “necessary disciplinary action”, and that he should be prosecuted over the alleged offences.
Despite the recommendation of the panel, Magu resumed duties at the police headquarters as commissioner of police — his rank before he was appointed acting EFCC chairman.
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