The Federal Government on Thursday revealed that the country’s crude oil production had dropped by 29 percent, as against the nation’s 2016 budget target of 2.2 million barrels per day, an indication that Nigeria’s current economic crisis might still linger for a longer time.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who disclosed this at the national conference of the National Association of Energy Correspondents (NAEC), with the theme, ‘Low Oil Price: Challenges and the Way Forward’, stated that the nation’s actual crude oil production was at 1.56 million barrels per day, about 700,000 barrels per day below the budget’s target production.
According to him, for Nigeria to meet its 2016 budget expectation, the country must produce 1.1 million barrels per day between now and year’s end, explaining that the shortfall was due to the Niger Delta crisis, which had equally resulted in loss of lives, high cost of operations, fuel shortages and environmental degradation.
Kachikwu said: “Domestic gas supply to power plants is also affected by about 60 percent, from 1.4 billion standard cubic feet per day to 550 million standard cubic feet per day. About 850 million standard cubic feet per day of gas production has been shut in due to the impact of crisis. Power outage exposure has been between 2,700 megawatts and 3,000 megawatts.
“Over 3,000 incidents of pipeline vandalism were recorded between 2010 and 2015. About 643 million litres of petroleum products were lost, amounting to N51.28 billion lost in 2015. Between January and June 2016, 1,600 incidents were recorded, resulting in a loss of 109 million litres of petroleum products and 560,000 barrels of crude oil to refineries,” he stressed.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Kacalla Baru, added that the decline in the oil production had impacted the nation’s revenue earnings, as oil sector accounted for approximately 90 percent of the country’s foreign exchange.
The huge drop in revenue earnings, according to him, had posed a grave danger for the adequate funding of the national budget, stressing that the major challenge now was how to secure the crude volumes to a level that would ensure that the country could deliver on its revenue target.
Baru said: “We are, therefore, working assiduously to resolve the security issues so that we can guarantee volumes. We cannot, however, deliver volumes without adequate funding of the oil industry.
“The underfunding has stymied production growth. Therefore, managing this funding issue is our most immediate challenge and transparent innovative financing approaches are being reviewed to address these funding shortfalls. Given the low oil price, sustainable returns need to be maintained,” he added.
However, information gathered disclosed that the standoff at the Escravos Tank Farm in the Ugborodo community, Warri South-West Local Government Area, Delta State, still continued, as the community vowed to continue the standoff until Chevron looked into their demands.
The National Youth Chairman of Ugborodo community, Ofe Nene, who stated, in a letter, that they appreciated the mediation efforts of state governor, Senator Ifeanyi Okowa, said: “We have been at Chevron facility’s gate, both day and night since August 8, 2016, not because we enjoy the torrent and very dangerous sea breeze of the Atlantic Ocean, but because we need the above stated changes to be effected in our community.”
Source: www.hellenicshippingnews.com