There are indications that the United States and other
nations will soon abandon Nigeria’s oil, which may negatively affect the
nation’s revenue generation.
According to the Energy Information Administration
(EIA), the US may drastically reduce its import of crude oil from Nigeria by 2022,
going by its projection of becoming a net energy exporter in four years. Oil
Pipe In the newly released Annual Energy Outlook for 2018, EIA stated that the
transition from net energy importer to net energy exporter will not take place
until 2050 in some sensitivity cases. “The transition of the United States to a
net energy exporter is fastest in the high oil price case, where higher crude
oil prices lead to more oil and natural gas production and transition the
United States into a net exporter by 2020. “In that case, higher crude oil
prices also result in higher petroleum product prices and lower consumption of
petroleum products, driving decreases in net petroleum imports. “In the High
Oil and Gas Resource and Technology case, with more favourable assumptions for
geology and technological developments, the United States becomes a net
exporter in 2020, and net exports increase through the end of the projection
period. “In cases with relatively low oil prices or less favourable assumptions
for geology and technological developments, US net energy trade still
decreases, but the United States remains a net energy importer through 2050.”
Meanwhile, India, Nigeria’s largest importer of crude, which reduced its demand
in 2017, started importing from the US. However, speaking on the implication of
this development to the NigeriaN economy, Chairman of the Petroleum Technology
Association of Nigeria, PETAN, Mr. Bank Anthony Okoroafor, stated that: “we
should be looking for alternative buyers, build refineries/upgrade and maintain
our existing refineries to focus on adding value to our crude oil which will
also create more jobs and more revenue to the country. We can be supplying
refined crude to the whole of Africa. “Also, we should change from been a net
importer of crude oil to net exporter of refined petroleum products.” He stated
that: “We import over 80% of products consumed. This is a shame. There is a big
gap in the supply of refined products in Nigeria and West Africa region. This
shows great potential for domestic refining of petroleum products. With oil
price hovering between 60 to 70 dollars per barrel, we should focus on
refining. “Our local refining capacity is 445,000 bpd but they have never
operated above 15% capacity which is a real shame. We consume about 17 billion
litres of PMS annually, 2.9 billion litres of AGO annually and 390 million
litres of aviation fuel annually.” Commenting on downstream activities, he
added that: “We must privatise the refineries, deregulate fully refined
products and allow demand and supply to regulate price. Deregulation will be a
key driver for growth within the refining sector. We really need bold and
decisive reforms to attract investors. “Government should focus on providing
enabling environment for business to prosper. If you want the refineries to
work, you will require financial independence; people who will be able to take
decisions, carry out their maintenance without seeking higher layers of
approval. “This is the only way to be bullish. There is need to have KPIs for
the Managing Directors of the refineries and let it be self-funding. It should
be financially independent; in that way our refineries will be working. Let’s
change from crude oil exporter to refined product exporter in 5 years time.”
There are indications
that the United States and other nations will soon abandon Nigeria’s
oil, which may negatively affect the nation’s revenue generation.
According to the Energy Information Administration (EIA), the US may
drastically reduce its import of crude oil from Nigeria by 2022, going
by its projection of becoming a net energy exporter in four years.
Oil Pipe
In the newly released Annual Energy Outlook for 2018, EIA stated that
the transition from net energy importer to net energy exporter will not
take place until 2050 in some sensitivity cases.
“The transition of the United States to a net energy exporter is fastest
in the high oil price case, where higher crude oil prices lead to more
oil and natural gas production and transition the United States into a
net exporter by 2020.
“In that case, higher crude oil prices also result in higher petroleum
product prices and lower consumption of petroleum products, driving
decreases in net petroleum imports.
“In the High Oil and Gas Resource and Technology case, with more
favourable assumptions for geology and technological developments, the
United States becomes a net exporter in 2020, and net exports increase
through the end of the projection period.
“In cases with relatively low oil prices or less favourable assumptions
for geology and technological developments, US net energy trade still
decreases, but the United States remains a net energy importer through
2050.”
Meanwhile, India, Nigeria’s largest importer of crude, which reduced its
demand in 2017, started importing from the US.
However, speaking on the implication of this development to the NigeriaN
economy, Chairman of the Petroleum Technology Association of Nigeria,
PETAN, Mr. Bank Anthony Okoroafor, stated that: “we should be looking
for alternative buyers, build refineries/upgrade and maintain our
existing refineries to focus on adding value to our crude oil which will
also create more jobs and more revenue to the country. We can be
supplying refined crude to the whole of Africa.
“Also, we should change from been a net importer of crude oil to net
exporter of refined petroleum products.”
He stated that: “We import over 80% of products consumed. This is a
shame. There is a big gap in the supply of refined products in Nigeria
and West Africa region. This shows great potential for domestic refining
of petroleum products. With oil price hovering between 60 to 70 dollars
per barrel, we should focus on refining.
“Our local refining capacity is 445,000 bpd but they have never operated
above 15% capacity which is a real shame. We consume about 17 billion
litres of PMS annually, 2.9 billion litres of AGO annually and 390
million litres of aviation fuel annually.”
Commenting on downstream activities, he added that: “We must privatise
the refineries, deregulate fully refined products and allow demand and
supply to regulate price.
Deregulation will be a key driver for growth within the refining sector.
We really need bold and decisive reforms to attract investors.
“Government should focus on providing enabling environment for business
to prosper. If you want the refineries to work, you will require
financial independence; people who will be able to take decisions, carry
out their maintenance without seeking higher layers of approval.
“This is the only way to be bullish. There is need to have KPIs for the
Managing Directors of the refineries and let it be self-funding. It
should be financially independent; in that way our refineries will be
working. Let’s change from crude oil exporter to refined product
exporter in 5 years time.”
Read more at: https://www.vanguardngr.com/2018/02/new-threat-usa-others-set-abandon-nigerias-oil/
Read more at: https://www.vanguardngr.com/2018/02/new-threat-usa-others-set-abandon-nigerias-oil/
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