- As Coronavirus wrecks havoc on country’s revenues
Nigeria, Africa’s biggest crude oil exporter, on Thursday declared plans to crash its oil production cost to $10 per barrel.
The cost stood at $18 and $23 per barrel, according to data from the Nigerian National Petroleum Corporation (NNPC).
Group Managing Director of the Corporation, Mallam Mele Kyari, who, during an engagement with the Nigerian Guild of Editors (NGE) declared plan to crash the prosuction cost, maintained that the oil price rout affecting the global market has rocked the corporation’s liquidity position and anticipated remittances to the Federation of N1.27 trillion.
Oil prices, Kyari said, “have gone down to sub $10/bbl due to the economic impacts of COVID-19 and
crude oil supply and demand imbalances,” adding that the “oil price collapse below cost has led to production deferement across the world.”
He continued; “The NNPC has however maintained steady production in order not to lose market share in the event of crude price recovery.
“Instead, NNPC has taken aggresive capital allocation to priotise low cost oil production and addirional measures to ensure cost discpline across including renogotiation down of contracts and other business obligations, this saving 40 per cent of proposed budget and cost.”
Stating that the corporation has “rolled out strategies to achieve sub $10 per barrel UOC without jeopardising growth,” the GMD maintained that revenue flow “has been greatly impacted by fall in price of about 65 per cent thus affecting the corporation liquidity position and the anticipated remittances to the Federation of about N1.27 trillion (April to December 2020).”
He maintaines that low demand and uncontrolled supply sent global storage to tank top with about 1 billion barrels and refinery ourput cut due to demand fall.
“Net back value of crude for long haul journeys to China have declined to $1.05 per barrel on the first of April 2020 due to low price and high frieght cost,” Kyari said.
On the impact of COVID-19 on NNPC business, the NNPC’s helmsman said hat his corpration “has sustained operations despite disruptions and slowed down economic activities.”
Asides this, he continued, “the NNpC has activated business continuity Protocol and Connect with NNPC and partners locations to ensure operations are sustained across the business value chain.”
Employees are, according to Kyari, “working remotely, supporting the delivery of the corporations’ business objectives and ensuring revenue flow to the Federation and sustaining National Energy Security.”