COVID-19: Stakeholders urge FG on measures to safeguard economy

Stakeholders in the Nigerian oil and gas sector have called on the federal government to engage in proactive measures to save its economy from shock as the world battles the negative effect of the COVID19 and dwindling oil prices.

This was agreed upon at a monthly webinar organised by the Nigerian Association of Petroleum Explorationists (NAPE) with the theme “New Normal: Post COVID-19 for the Nigerian Oil and Gas sector.”

During the live session which featured experts such as Chief Executive Officer, Seplat Petroleum Development Company Plc (SEPLAT), Dr Austin Avuru, the current health crisis has confirmed that no economy, especially the oil-reliant ones are not spared from financial shocks, hence the urgent need to diversify to battle against poverty and inequality.

While speaking, Avuru said current realities had shown that oil revenue was trending downwards below 45 per cent as a percentage of total federal revenue for 2020.

According to him, “this is unlike in the past where revenue from oil accounted for 80 percent of federal revenue and 92 per cent of foreign exchange.”

The SEPLAT boss noted that there had been price shocks in the past, including the recent one in 2016 where crude oil price went as low as $26 per barrel before it rebounded.

“However, this is different because this time around we have a combination of a surprise shock with unprecedented demand drop and a global economic meltdown.

“This time, because there was a global pandemic that led to a global economic meltdown, some 25 million barrels per day of demand was cut out. It also came at a time when there was a struggle for market between the shale producers in the United States on one hand and Russia and Saudi Arabia on the other hand that led to supply shock.

“So we had an unprecedented situation where prices actually went negative even though it was just for a few hours. We are looking toward a new normal of very low oil prices, somewhere between $40 and $50 per barrel. We will be lucky if it gets to $60,”Avuru said

It was noted that within the last five years, investment in the oil and gas sector has been drying up, this collaborates with the recent report by the International Energy Agency, that the Covid-19 pandemic has set in motion the largest drop in global energy investment in history, with spending expected to plunge in every major sector in the year, from fossil fuels to renewables and efficiency.

Also, the agency said that the unparalleled decline is staggering in both its scale and swiftness, with serious potential implications for energy security and clean energy transitions. Thus, global investment is now expected to plummet by 20 percent, or almost $400 billion, compared with last year.

Avuru noted that there had been price shocks in the past, including the recent one in 2016 where crude oil price went as low as $26 per barrel before it rebounded.

“However, this is different because this time around we have a combination of a surprise shock with unprecedented demand drop and a global economic meltdown.

“This time, because there was a global pandemic that led to a global economic meltdown, some 25 million barrels per day of demand was cut out.” It also came at a time when there was a struggle for the market between the shale producers in the United States on one hand and Russia and Saudi Arabia on the other hand that led to supply shock.

“So we had an unprecedented situation where prices actually went negative even though it was just for a few hours. We are looking toward a new normal of very low oil prices, somewhere between $40 and $50 per barrel. We will be lucky if it gets to $60,” Avuru said.

He said according to projections, it would be difficult for oil prices to rise to what Nigeria and other countries used to know, as there was also competition from Shale and other renewable sources of energy.

He said the economic readjustment should be focused on gas as enabler for domestic energy security and catalyst for industrial growth, minerals, mining, and agriculture as additional Forex earners.

Avuru also urged operators in the oil and gas sector to explore various ways to transform their portfolios in order to stay afloat during these critical times.

He said “There has to be regional market capture. So the refineries and petrochemical plants like Dangote have to target the entire West African region for selling of their products.

“Those of us who are in the gas business should take advantage of the West African Gas Pipeline with the hope to deliver the gas that will power the entire region.

“The same thing with Liquefied Petroleum Gas, all of these regional markets we now have to capture, as part of our survival strategy.”

He called on the federal government to intensify effort to pass the PIGB, ensure that the bill takes into cognisance the realities of the time, and make policies that will revitalise the economy.

 

 

 

 

YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE

Buy and read digital replicas of your TRIBUNE titles by subscribing through E-VENDING

UPDATE: FG Eases Lockdown, Reopens Banks, Religious Centres, But Schools Remain Closed
Nigeria has moved to the second phase of the ease of lockdown in the effort to contain the COVID-19 pandemic as more restrictions have been lifted in the gradual move to fully reopen the economy. The new measures, which will be in place for the next four weeks, include the reopening of places of worship provided…Read full story

Obaseki Presents Re-Election Bid Nomination Form To Buhari
The governor of Edo State, Godwin Obaseki, has presented his nomination form, seeking re-election on the platform of the All Progressive Congress (APC) to President Muhammadu Buhari. The governor stormed the presidential villa, Abuja, on Monday, to see the president, brushing aside the controversy generated by… Read full story

UPDATE: Petrol To Sell At N123/Ltr As PPPRA Reviews Ex-Depot Price
The Petroleum Products Pricing Regulatory Agency(PPPRA) has reviewed the existing Premium Motor Spirit (PMS) pump price band between N121.50 and N123.50 per litre for the month of June. It also pegged the ex-depot price band at N102.13 and N104.13/litre, weeks after the Nigerian National Petroleum Corporation… Read full story

FG Relaxes Ban On Religious Gathering, Curfew Now From 10pm To 4am
The Federal Government on Monday announced the relaxation on the ban on religious gathering in the country from June 1. The Presidential Task Force on COVID-19 disclosed this during its daily briefing in Abuja, saying this is based on the guidelines and protocols agreed by state governments… Read full story

Nationwide Strike: FG Begins Negotiation With Resident Doctors
The Federal Government on Monday began negotiation with the Nigerian Association of Resident Doctors (NARD) with a view to get them to shelve their planned strike as the nation needs their cooperation to successfully battle the COVID-19 pandemic… Read full story

Be More Security Conscious, CAN Tells Churches
The Christian Association of Nigeria (CAN) has charged churches to be more security conscious, and also ensure the security of their leaders. CAN said this call became necessary following the recent kidnap of the Chairman, Nasarawa State Chapter of the Christian Association of Nigeria, Bishop Joseph Masin… … Read full story

We Inherited N26bn Unpaid Gratuities Of 6,274 Retirees ― Gov Makinde
Oyo State governor, Mr Seyi Makinde on Monday disclosed that his government met unpaid gratuities totalling N26 billion. He made the disclosure in a Facebook post in which he stated that his administration has cleared backlogs of gratuities from 2012 to 2013… Read full story

Immigration Boss Warns Officers Against Surcharging Passport Applicants
The Comptroller-General of Nigerian Immigration Service, Mr Muhammad Babandede CGI, has warned passport officers that no extra charges are allowed apart from the approved fees by the Federal Government. “Nigerians are not to be surcharged but we must serve them sincerely to gain their confidence,” he said… Read full story

More Than One In Six Young People Out Of Work Due To COVID-19 —ILO
MORE than one in six young people have stopped working since the outset of the COVID-19 pandemic while those who remain employed have seen their working hours cut by 23 per cent, the International Labour Organization (ILO) has said… Read full story

7 APC Governors Meet Tinubu Over Obaseki
SEVEN governors elected on the tickets of the All Progressives Congress (APC) met with the national leader of the party, Senator Bola Tinubu, at the State House, Marina, Lagos, on Sunday, over the fate of the embattled governor of Edo State, Mr Godwin Obaseki… Read full story

You Must Submit Your Voters Register Ahead Of Primaries, INEC Tells Political Parties
Ahead of Edo and Ondo State governorship elections, the Independent National Electoral Commission (INEC) has advised political parties to inform the INEC on the mode of primary it wants to adopt and submit the list of its registered members ahead of the exercise… Read full story

EDITORIAL: Nigeria Police And Citizen Olaoluwa Bolarinwa
LIKE the proverbial tortoise that is perennially enmeshed in one controversy or another, the police are once again in the news for the wrong reasons. This time around, some policemen have allegedly tortured one Citizen Olaoluwa Bolarinwa to death for failing to give them satisfactory information about his friend who was… Read full story

You might also like
Comments

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. AcceptRead More