By Udeme Akpan & Michael Eboh
LAGOS — Acting President, Prof. Yemi Osinbajo, yesterday, expressed concern over the rising volatility in the global crude oil market, stating that the days of zero oil, where the commodity would become irrelevant, were clearly around the corner.
AG PRESIDENT OSINBAJO
This came as the Nigerian National Petroleum Corporation, NNPC, also, yesterday, disclosed that vandals have sabotaged the Trans Niger Pipeline, TNP, in Ogoniland, forcing Nigeria’s crude oil output to drop by 150,000 barrels per day.
Speaking at the opening ceremony of the extra-ordinary session of the Council of Ministers of African Petroleum Producers’ Organisation, APPO, in Abuja, Osinbajo said the volatility in the global crude oil market had triggered much soul-searching, adding that governments across the continent were compelled to ask themselves difficult but necessary questions about the present and the future.
He said: “Over the last three years or so, oil producing countries across the world have experienced the full impact of the drop in oil prices, with significant negative impact on government revenues and budgets and of the value of national currencies.
“Besides, the reality of the future, where demands for and revenues from oil drop sharply, is already upon us; and almost every major oil importing country today has embarked on an aggressive non-fossil fuel alternative programme.
‘’China, Japan and some Scandinavian states have already set dates within the next 10 to 15 years, to produce and use only electric vehicles.”
However, Osinbajo explained that it was inescapable that Nigeria needed oil to get out of its dependency on oil, adding that the capacity to add value to the crude oil that Nigeria and other countries extract was crucial.
He added that as the world begins to move to the direction of alternative and clean energy, the reform of APPO should factor in these new realities and aim to reposition the organisation as a clear leader in this regard.
Also speaking, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, declared that the oil world was fast disappearing, adding that with current trends in technology and environmental concerns, it was clear that over the next 20 to 30 years, oil would become a fading, if not a faded, product.
He noted that having given birth to APPO, Nigeria intended to play a solid leadership role, working collaboratively with its members to move the organisation very quickly and very rapidly along the lines with what it plans to do in Nigeria’s petroleum industry.
He urged members of the organisation to develop a framework that would ensure that APPO replicated what had happened in OPEC over the last nine to 12 months.
TNP vandalized, oil output dips by 150kbpd
Speaking on the sideline of the conference, Group Managing Director of the NNPC, Mr. Maikanti Baru, disclosed that the Trans Niger Pipeline, TNP, was attacked yesterday and had impinged on Nigeria’s ability to maintain its last week’s output of 2.2 million barrels per day.
He said: “Unfortunately, we have not been able to sustain last week’s output because of challenges.
“As I am talking to you this morning, the Trans Niger Pipeline has been breached in Ogoniland, and that is 150,000 barrel per of oil, has been locked up daily. That has been fairly an issue in that area. We hope we can continue at that level.”
OPEC may reconsider plan to cut Nigeria’s output
The vandalism of Nigeria’s pipeline and drop in production may influence the decision of the Organisation of Petroleum Exporting Countries, OPEC, to cut the oil output of Nigeria and Libya in order to stabilise oil market.
The organisation agreed with several non-OPEC producers, led by Russia, to cut oil output by 1.8 million barrels per day (bpd) from January 2017 until the end of March 2018.
The two nations were exempted from the limits to help their oil industries recover from years of unrest.
The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, JMMC, which met in St. Petersburg for its fourth meeting yesterday to review the June 2017 report as well as the first six months of the Declaration of Cooperation, as submitted by the Joint OPEC-Non-OPEC Technical Committee (JTC), reviewed the JTC report and noted that the oil market was making steady and significant progress towards rebalancing.
It disclosed that this assertion was based on the Report of the JTC for the month of June 2017, which reviewed market developments and the results of the first six months of progress made according to OPEC’s 171st Ministerial Conference Decision and the respective voluntary adjustments, in line with the Declaration of Cooperation.