The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has disclosed that Nigeria has about 50 cargoes of crude oil that have not found a landing in the market as result of the Coronavirus pandemic.
According to NNPC, what this means is that there are no off-takers for them for now due to the drop in demand
This is just as the corporation also revealed that over 12 liquefied natural gas cargoes were stranded in the global market, and that had not happened before.
Speaking at a roundtable gathering in Abuja Kyari, contended that for Nigeria to become competitive in the global crude oil market it must ensure it reduce the cost of producing crude oil.
According to him, “Today, I can share with you that there are over 12 stranded LNG cargoes in the market globally. It has never happened before. LNG cargoes that are stranded with no hope of being purchased because there is an abrupt collapse in demand associated with the outbreak of Coronavirus.”
The NNPC boss pointed out that Saudi Arabia had given a discount of $8 while Iran gave $5 to their off-takers in some locations in the face of the Coronavirus pandemic, adding that what this means is that when crude oil sold at $30 per barrel, countries like Saudi Arabia will sell at $22 per barrel and Iraq at $25 per barrel.
NNPC, he stated was strategically putting in place steps that would reduce the cost of producing crude oil in Nigeria, adding that a reduced cost of production would not only create a market for Nigeria’s crude but that it would also make Nigeria a choice destination for Foreign Direct Investment(FDI)
Kyari said that presently the cost of production in Nigeria was between $15 to $17 per barrel, stressing tha for leaders in the industry, such as Saudi Arabia, the cost of production was between $4 and $5 per barrel.
The NNPC GMD noted that as a result of the uncertainties of the global crude oil market, countries that produced at the cheapest price would remain in the market, while countries with a high cost of crude oil production would not be able to cope with the competing prices.