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THE Organisation of Petroleum Exporting Countries, OPEC, on Wednesday, put Nigeria’s oil output at 1.3 million barrels per day, mb/d. This was disclosed by the organization in its July Oil Market Report, disclosed that the output was based on data collected from what is referred to as ‘direct communication’, adding that the country’s output remained at 1.4 mb/d when based on ‘secondary sources’.
The report, which showed that Nigeria has fully complied to the output restriction order of the organization, also showed that at the current $42.06 price of the nation’s Bonny Light, it might be impossible for the nation to fund its 2020 budget, earlier benchmarked on $28 per barrel, especially because of the high cost of production that has been estimated at $28 per barrel.
The report also showed that the nation did not do well in terms of oil exploration and production, as its rig count, a major indicator for measuring performance, dropped from nine recorded in June to six in July 2020. Investigation by Vanguard showed that operations, including exploration and production, were slowed down mainly because of the negative impact of the prolonged coronavirus pandemic in the country.
Nevertheless, in his email response to a reporter, Lead Promoter, EnergyHub, Nigeria, Dr. Felix Amieyeofori, said: “The situation is a function of the drop in oil price. It is also caused by the coronavirus pandemic, which forced many oil companies, not only to cut their capital and operating budgets but to also ensure that their staff are safe on rig. “Frankly, because of the quota restrictions, there is no immediate danger, as new oil will not be produced but capped until the global economy picks up with increased demand. However, in the long run, it will affect Nigeria’s capacity to open up more production and of course replace declining reserves.”
He added: “There is very little the country can do at this moment, as this is a global phenomenon. The country is not in any position to help, even the indigenous companies. At the moment, rather than cry over the oil industry, they should look at opening up other sectors of the nation’s economy. The economic team lead by the Vice President recently submitted a report where they are looking at boosting other sectors of the economy that can create up to 10 million jobs within a short period. That is what the country should focus on at the moment.”
The Ghana National Petroleum Corporation (GNPC) Professorial Chair, Oil and Gas Economics and Management, Institute for Oil and Gas Studies, University of Cape Coast, Ghana, Prof. Omowumi Iledare, who attributed the development to low investment, had earlier called for the completion of work on the nation’s Petroleum Industry Bill, PIB, required to attract more local and foreign investments into the industry.
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