Nigeria, Algeria, others lost $1tn to oil crash – OPEC

Nigeria, Algeria, others lost $1tn to oil crash – OPEC

Nigeria , Algeria and other members of the Organisation of Petroleum Exporting Countries lost a cumulative revenue of about $ 1 tn as a result of the crash in crude oil prices , the Secretary - General of OPEC , Mohammed Barkindo , has said .
He stated this at the headquarters of the Federal Ministry of Petroleum Resources during a visit to the Minister of State for Petroleum Resources, Dr . Ibe Kachikwu , in Abuja on Monday .
Crude oil prices crashed from over $ 100 per barrel in 2014 to as low as $ 23 in 2016 , a development that threw many oil dependent countries into economic crisis .
Barkindo stated that the crisis in the oil sector was the worst ever in recent memory , adding that the industry globally lost about $ 1 tn during the period of the oil price fall .
“ In terms of the gravity of this cycle, crude oil prices have crashed by over 80 per cent from the fall of 2014 through January 2016 . How you survived as a government and institutions under this industry remains a miracle . I ’ ve been to other countries and I saw how they are struggling, but you have weathered the storm , ” he said .
The OPEC scribe , however , explained that the shut - in of about 1 . 8 million barrels of crude oil per day within a period of six months by the 13 OPEC and 11 non - OPEC members paid off considering the rise in crude oil prices .
He said , “ This industry globally has lost nearly $ 1 tn in terms of differed projects and outright cancellation of projects across the supply chain : upstream , midstream and downstream. And this is the greatest threat that is facing future security of supply. We need consistent investments to maintain current production as well as grow the reserves .
“ In terms of national revenues , since all our countries are dependent on this commodity , within OPEC alone , we have lost cumulatively about $ 1 tn . Therefore , we , together with our OPEC friends , are determined to solidify this platform to maintain a stable environment and restore confidence for investors. ”
Barkindo said diversification of the national economy from crude oil should be given the highest attention , as he noted that countries like Saudi Arabia were diversifying away from the complete reliance on revenue from the sale of crude .
“ All our competitors within OPEC are also focused on the issue of diversification . I ’ m just coming from Saudi Arabia, the largest producer depending solely on oil and gas , they ’ ve come out with a programme to diversify their economy within the context of the vision 2030 , ” he added .
Barkindo lauded the Federal Government for exiting the joint venture cash call agreement it had with international oil companies.
According to him , successive governments had tried to end the cash call regime but could not despite the financial burden that it had on Nigeria as well as the country’ s inability to meet up with the demands of the agreement .
“ By ending it, you are clearing an over - hang of debt that is too high , yet maintaining the level of production and also focusing on an incremental growth that will continue to sustain not only the industry , but the domestic economy , ” he said .
Barkindo observed that the high turnover of group managing directors at the NNPC had also been a challenge to the smooth running of the corporation , but expressed delight that the current management was doing well.