Malam Mele Kyari, Group Managing Director, NNPC

Oil Price Crash: Prepare for tough times, NNPC warns Nigerians

* Disengages 400 senior staff, appoints new Spokesperson

* Says 50 Nigeria’s crude oil cargoes stranded over COVID-19

Isola Moses | ConsumerConnect

Against the backdrop of the reported crash of crude oil price in the international oil market and its far-reaching effects on effective implementation of Nigeria’s Federal Budget 2020 and the nation’s economy in general, the Nigerian National Petroleum Corporation (NNPC) has warned Nigerians to prepare for more economic challenges ahead.

ConsumerConnect gathered that Malam Mele Kyari, Group Managing Director (GMD) of NNPC, gave the warning in Abuja, FCT, Wednesday, at a consultative roundtable meeting organised by the Central Bank of Nigeria (CBN) with the theme “Going for Growth 2.0”.

Nigerian National Petroleum Corporation Towers, Abuja, FCT

Kyari disclosed that “today there are over 12 LPG cargoes stranded globally because they have no hub because of the abrupt collapse in demand associated specifically with Coronavirus.”

“It has also hit other sectors from the production stage which is the liquid crude. And as of today with the Nigerian crude, we have 50 cargoes that have not found landing.

“It means the traders have purchased it, but they don’t know how to take it.”

Malam Kyari urged Nigerians to brace up for harsh economic conditions in months ahead, even if the price of crude oil in the international market jumps to over $50 from the current $30/barrel.

The Federal Government had used $57 barrel per day (bpd) oil price benchmark for Budget 2020.

On the possible scenarios confronting the Nigerian economy as of now, the NNPC GMD said, “while Nigeria’s oil producing competitors produce oil at a relatively cheaper cost, Nigeria’s production cost is still on the high side.”

According to him, Iraq dropped their price by $5 and Saudi Arabia by $8 in some locations.

Crude oil prices are dropping in the international market in view of Coronavirus disease Malam

So, when your crude oil sells at $30 and you’re dropping it by $8, it means that in the market, you’re selling it at $22.”

He stated that the development “is a huge problem that can be accommodated in some production environment like in Saudi Arabia.

“Today, the best of our production system is $15-17 a barrel, there are many countries whose cost of production is $30 and we’re one of them.

“So, when the price now goes to $22 and we’re producing at $30, we’re out of business.”

Meanwhile, the NNPC has disengaged over 400 senior staff across Nigeria, with effect from Thursday, March 12, 2020.

Sources in the NNPC disclosed that the disengagement affected predominantly staff who were scheduled to retire between now and 2022, while it also engaged some staff and promoted others, who are scheduled to resume same Thursday.

The state oil corporation has also appointed Mr. Kehinde Obateru, as the new Group General Manager, Group Public Affairs Division.

Mr. Obateru, who until recently, was the Spokesman for the NNPC London Office, would be the new Spokesman of the NNPC, replacing Mr. Ndu Ughamadu, who retired September 2019.

He would also be taking over from Mr. Samson Makoji, who had been the Acting Group General Manager, Group Public Affairs Division of the NNPC, since Ughamadu’s exit from the NNPC.

It was further learnt that by Mr. Gboyega Bello, who had been promoted as General Manager of the Group Public Affairs Division, would replace Obateru in the NNPC London Office.

Sources also observed that there were a few promotions and redeployments among the top hierarchy of the Corporation, while they alleged that some of the disengagements and redeployment were not justified.

Additional reports by Gbenga Kayode and Alexander Davis

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