Timipre Sylva, minister of state for petroleum resources,
says the increase in prices of global crude oil is not good for the country.
Speaking on the rising crude oil prices in an interview with
Bloomberg Television, Sylva said that Nigeria’s comfort zone in terms of oil
prices was between $70 and $80 per barrel.
On Thursday, the global oil benchmark, Brent crude, rose
over 5 percent to trade at $102.27 a barrel with escalating tensions between
Russia and Ukraine.
The minister said Nigeria was not gaining anything from the
soaring prices.
The subsidy burden, pipeline shutdowns are among the reasons
why Nigeria is not benefitting from high crude oil prices.
“I’m hopeful the prices will move around, maybe $80, maybe
$70. We are hoping it will come down to somewhere around $70 to $80, which will
be sustainable for us to the end of the year,” he said.
Last year, Nigeria agreed to voluntarily cut its daily crude
oil production by 939,000 barrels between January and March after a meeting
with the Organisation of Petroleum Exporting Countries (OPEC) and its allies.
Sylva said the inability of Nigeria to activate the oil
wells it shut down when OPEC instructed producing countries to cut production
as well as the lack of investment in the upstream sector is affecting the
country’s ability to increase production.
He said Nigeria is losing at least 300,000 bpd to its
capacity challenge.
“We are working hard on that (production increase). What
happened to us was the fact that we had to cut back at the time, and, of
course, in such a way you can’t cut back mathematically,” he said.
“So, you want to cut
back 100,000 barrels that you shut out, maybe we’ll shut down about 200,000 to
300,000 barrels. So, at the end of the day, we over-complied because we just
couldn’t achieve it mathematically.
“In trying to cut down, we cut down too much. And now to
come back, it’s not been easy for us to get the wells back to production.”
According to the minister, a lot of additional investments
would be needed to ramp up production, but he lamented that foreign funding was
drying fizzling out for the industry.
Answering questions on the supply of gas to Europe, Sylva
said he was not aware of discussions with the United States for Nigeria to
increase the supply of gas to Europe amid Russia and Ukraine tensions.
According to him, if it has to happen, it would take time
and investment.
He said the country intended to begin supply to the
continent through Algeria and Morocco in the near term.
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