Crude oil production cuts likely to persist into 2019 –Kachikwu

The Minister of State for Petroleum, Ibe Kachikwu, has said the decline in the nation’s crude oil production may likely continue into next year.

According to the Q2 GDP data by the National Bureau of Statisitcs (NBS), the country’s average daily crude oil production had dropped in the quarter to 1.84 million barrels per day from 1.87 million barrels per day and 2.00 million barrels per day recorded in Q2 2017 and Q1 2018, respectively.

The minister said this on the sidelines of the 2018 Summit of the Forum on China-Africa Cooperation (FOCAC) currently ongoing in Beijing, China.

Kachikwu noted that the decision to raise or cut production volume would be largely dependent on the prices of crude in the international market.

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“If prices remain in the seventies, definitely what you are going to find is everybody say leave it as it is,” he told Bloomberg.

“We struggled with that decision in June, but if come December, prices go up northwards dangerously, we begin to foresee reactions, we expect reactions from President Trump and his team, so when we begin to see that, we probably going to see a loosening up of volumes.

“If prices go southwards, we are going to firm up on those, like you know Russia itself is also a bit weary on how long that can continue because everybody has its own internal drive – Saudi Arabia, to some extent also.

“How long we keep this going is going to be a balancing act between how well the buoyant prices make up for the loss of volumes,” he added.

Last week, the Minster of Budget and National Planning, Sen. Udoma Udo Udoma, had pointed out that the sluggish growth recorded in the nation’s economy in the second quarter of 2018 was largely driven by contraction in the oil sector.

According to the budget minister, the contraction in the crude Oil $ Gas sectors was attributable to some production issues, which he said, were being addressed by the Nigerian National Petroleum Corporation (NNPC).

The Non-Oil sector grew by 2.05 percent, while growth in the Oil sector slowed to -3.95 percent in the second quarter of 2018.

 

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