Timipre Sylva, Minister of state for petroleum resources, has revealed that Nigeria is not comfortable with the persistent increase in global crude oil price, insisting that the country will only be relieved if the prices hover around $70 and $80 per barrel.
He made this known in a telecast while speaking with Bloomberg’s Simone Foxman on the sideline of the 6th Gas Exporting Countries Forum(GECF) summit in Doha.
Sylva in his response to the interviewer said that Nigeria will only be comfortable with oil prices when it is between $70 and $80 per barrel.
EnergyDay check on Thursday evening, revealed that the price of Brent crude oil, the benchmark of Nigeria’s crude oil, is now well over $103 per barrel for the first time and a seven-year high since July 2014, as Europe crisis escalates due to Russian forces invasion of Ukraine in a show of force.
Sylva said, “I’m hopeful the prices will move around, $70 and $80 per barrel. We are hoping it will come down to somewhere around that range, which will be sustainable for us till the end of the year.
He also noted that the decision of the Nigerian Government to voluntarily cut daily crude oil production by 939,000 barrels between January and March, 2021, based on the Organisation of Petroleum Exporting Countries (OPEC) quota for the country has had immense impact on the capacity of the country to upscale production to the new OPEC quota.
Sylva also added that lack of investment in the upstream sector has also affected the country’s ability to recover from the production shortfall. He noted that the country is losing at least 300,000 bpd due to inability to meet optimal production.
He said, “We are working hard to increase our crude oil production. We over complied with OPEC in 2021, when we were asked to cut back on production at that time. When we received the OPEC’s quota decision, it was difficult cutting back mathematically.
“So, when asked to, for instance, cut back 100,000 barrels , we did about 200,000 to 300,000 barrels in order to achieve the quota. So, at the end of the day, we eventually cut down too much. And now, when it is time to recover, it became so difficult due to the lack of investment to achieve this as well as lack of infrastructure to meet production target.”
The Minister complained that it is becoming increasingly difficult to get investment into the sector because of foreign spending cuts.
Speaking on funding alternatives available for African oil and gas development amidst foreign spending cut, the Minister said, “As Africans, we have realised that we cannot continue to rely completely on foreign investment alone.
“We are positioned to rallying funds from development banks such as #Afrieximbank for oil and gas production in Africa. We see funding cut by international investors as a big challenge for the industry, so the focus is now to look inward,” Sylva said.
He therefore challenged African development banks on the need to invest more in the continent’s oil and gas potential.