The Nigerian government has expressed concern over the rising price of oil, saying that the rising oil price is not good for the country.
In an interview with Bloomberg on Wednesday, the Minister of State for Petroleum Resources, Mr. Timipre Sylva, stated that Nigeria’s comfort zone in terms of oil prices was between $70 and $80 per barrel and that he hopes that oil price will come down to that range.
The minister did not specify the reasons why rising oil prices is not beneficial for the country as oil prices soar to eight-year highs on the back of escalating crisis between Russia and Ukraine.
However, Nigeria’s controversial fuel subsidy regime that would consume about N3 trillion this year and the country’s inability to meet its OPEC quota will not be far from the reasons behind the comment.
Thursday morning oil bench mark Brent crude rose above $100 for the first time since 2014 to as high as $104.33 per barrel.
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Sylva stated, “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.
“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 really cut back mathematically.
“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.”
“It’s not very easy these days to get the investments in. We really are not able to meet up our quota now. But I believe that we’re working so very hard to ensure that, because we are not happy at all.
“I mean, with the kind of prices we are seeing. We are obviously not happy about it. So we would like to definitely be back on track by later this year. It’s not been very easy to get investments. A lot of people can’t get investments into the sector.”
He also said that additional investments will be needed to increase production. He however lamented lack of foreign investment in the industry.
“It’s not very easy these days to get the investments in. We really are not able to meet up our quota now. But I believe that we’re working so very hard to ensure that, because we are not happy at all.
“I mean, with the kind of prices we are seeing. We are obviously not happy about it. So we would like to definitely be back on track by later this year. It’s not been very easy to get investments. A lot of people can’t get investments into the sector.”
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
