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| Alison-Madueke |
The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke made it known at the 15th Nigeria Oil and Gas Conference in Abuja yesterday that the global
fall in oil prices was last seen during the peak of the financial crisis
in 2008 and that the 2008 plunge in crude oil prices was due to a weak global economy, strong
dollar as well as an over supplied oil market. However she stressed that the
current plunge was different as there was limited visibility as to how
it would evolve. The petroleum resources minister further noted that the Crude oil prices have dropped by 60 per cent from about $110 in June
2014 to $40 by January 2015. Brent is currently trading at between $50
and $60 per barrel.
She said most analysts agree that as oil producers, we should brace for extended
periods of lower prices and increased price volatility. The resultant
effect is that companies are slashing capital spending in 2015 as a
response to this dramatic collapse in oil prices. The minister said it was obvious that many oil producing countries,
including Nigeria, were facing declining government revenues due to low
oil prices, adding that this would pose challenges to funding of
projects. She stated that all accomplishments of
the oil and gas sector were now been challenged by the current low price
environment, which was characterised by dramatic revenue declines. This means that flexibility in capital
expenditure and funding in general will be further constrained in 2015.
The minister said the persistent
depressed oil prices might limit industry scope to manoeuvre in growing
long term production and reaching the target of four million barrels of
oil per day.
If we would recall, the fall in global crude oil prices which for now has no end in sight with respect to the plunge, have caused a harsh economy in Nigeria and many are beginning to feel the effect.
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