The Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has stated that nothing less than 50 cargoes of crude oil from Nigeria have not found landing owing to the outbreak of Coronavirus.
He added that this implies that there are no off-takers for them for now due to the drop in demand saying that 12 stranded Liquified Natural Gas (LNG) cargoes are in the market globally.
He spoke at the Central Bank of Nigeria Round Table discussion in Abuja.
The AG. Group General Manager, Group Public Affairs Division, Mr Samson Makoji, who disclosed this in a statement, quoted him as saying, “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 abrupt collapse in demand associated with the outbreak of coronavirus.”
He said that in the face of the Coronavirus global pandemic, countries like Saudi Arabia have given a discount of $8 and Iraq $5 to their off-takers in some locations. This means that when crude oil sells at $30 per barrel, countries like Saudi Arabia are selling at $22 per barrel and Iraq selling their crude at $25 per barrel.
Kyari expressed readiness to strategically put in place measures that would alleviate the cost of crude oil production in Nigeria to create a market for Nigeria’s crude and make Nigeria a choice destination for Foreign Direct Investment.
According to him, at the moment the cost of crude oil production in the country is within the range of $15 to $17 per barrel.
He added that some leaders in the industry such as Saudi Arabia’s cost of production are between $4 and $5 per barrel.
He also noted that due to the uncertainties of the global crude oil market, countries that produce at the cheapest price would remain in the market while those with a high cost of crude oil production would not be able to cope with the competing prices.
The GMD said the NNPC is working round the clock to increase the countries daily production to 3million barrels per day and shore up the crude oil reserves to 40billion barrels.
Kyari called on government at all levels, captains of Industries, and the organized private sectors to brace up for the new low regime of global crude oil prices, adding that realistic estimates must reflect the current realities of the crude oil market.