The federal government said it would step up efforts to boost crude oil production to take advantage of global oil prices, hinting it would reach full production by the end of the year.
The move comes at a time when the global price of crude oil has reached over $100 a barrel following the Russian-Ukrainian war.
This was announced by the Minister of State for Petroleum Resources, Chief Timipre Sylva, in Abuja during a briefing to journalists on the upcoming Nigeria International Energy Summit (NIES 2022) scheduled for February 27 to March 3. .
Sylva’s statement was in reaction to global oil benchmark Brent Crude rising more than 5% to $103.33 a barrel from $96 a barrel as tensions escalated between Russia and Russia. ‘Ukraine.
According to NAN, Sylva said that Nigeria’s oil production was not optimal and therefore encouraged increased production.
He said Nigeria’s oil production was already not where it was a few months ago, adding that it needed to increase gradually and that before the end of 2022, Nigeria would have fully recovered its production.
What the Minister of State for Petroleum Resources says
Sylva pointed out that the country’s oil production is not very optimal at this stage, adding that they would rather have production that can take advantage of the high price through high inputs.
He said, “There’s a lot going on, we’re not happy that we can’t take advantage of the high prices, it’s our loss, and we’re doing everything to make sure we increase our production.
“In industry, the price of oil was determined by many fundamental issues.
“When oil prices go up, that means there are other competing productions that will also appear, for example shale oil producers in the United States will now find it profitable whereas if it is at a certain level , it will not be profitable for them to produce.
“Once oil prices hit a certain point, you encourage other production that otherwise wouldn’t be on the market. We’re not happy when oil prices hit a certain level, but rather at a point that will be optimal for us.‘
The minister described Nigeria as a net oil importer, adding that when crude oil prices rise globally, it may also affect the price of petroleum products, which would not be good for the country.
He also said, “It’s not like we are happy with the prices because we take from one side and give from the other side, in the end we don’t win, we take high prices and also import high oil products.
“We encourage more producers to neutralize the market for us. »
What you should know
- Recall that on Thursday, Brent crude was trading at $100 a barrel on news of Russia’s attack on Ukraine, which in turn heightened fears that a war in Europe could disrupt the economy. global energy supply.
- The federal government had previously expressed concern over rising international crude oil prices, saying the increase was not good for the country.
- Sylva had argued that Nigeria’s comfort zone in terms of oil prices was between $70 and $80 a barrel, saying that at present, Nigeria was not getting anything out of the price spike.
- Nigeria’s controversial fuel subsidy scheme, which could gobble up about 3 trillion naira this year, coupled with its failure to increase production to meet the quota allocated by the Organization of the Petroleum Exporting Countries (OPEC), have combined to limit gains from higher oil prices.
- Sylva blamed Nigeria’s inability to activate the oil wells it shut down when OPEC ordered producing nations to cut production as well as the lack of investment in the upstream sector for the country’s inability to increase production.