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Home [ MAIN ] COVER International Oil price Crashes To $86/barrel

International Oil price Crashes To $86/barrel

Crude Oil Sees Gains As NNPC Faces More Financial Pressure

Brent, the global crude benchmark, fell in price on Sunday, as practically all oil grades, saw lower pricing on the opening day of the week, despite attempts by the Organization of Petroleum Exporting Countries (OPEC) to stabilize the commodity’s price.

As oil prices fell, statistics from OPEC’s September 2022 Oil Market Report revealed that an oil rig in Nigeria remained inactive in August 2022, compared to the number of operational rigs the previous month.

According to industry numbers reviewed in Abuja on Sunday, Brent fell by $4.31, or 4.76 per cent, to $86.15 per barrel as of 4.18 pm Nigerian time. WTI crude slid $4.75, or 5.69%, to $78.74/barrel, while the cost of oil grades climbed in OPEC Basket and declined $0.24, or 0.25 per cent, to $96.31/barrel.

According to data from OPEC’s World Rig Count on operating rigs in Nigeria as of August this year, the country’s operational rig count decreased from 11 in July to 10 in August.

According to the organization, the average number of operational oil rigs in Nigeria in 2019 was 16, but this fell to 11 in 2020 before finally collapsing to seven in 2021. The average number of operational oil rigs in Nigeria in the first and second quarters of 2022 was estimated to be eight and ten, respectively.

OPEC’s data indicated that the functional rigs increased to 11 in July this year, but this was not sustained, as it again dropped to 10 in the succeeding month of August. The major reason for the dormancy or halt in the operations of Nigeria’s oil rigs was the alarming rate of crude oil theft.

The Federal Government, oil unions, and military, among other stakeholders, have repeatedly expressed concerns about this. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), for instance, recently stated that some oil companies had to shut in some of their oil wells following the persistent theft of crude.

PENGASSAN also stated that the military should be made to explain how huge volumes of oil were stolen from the Niger Delta despite the protection of oil installations by their personnel.

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, told our correspondent that though there might be some inconsistencies in oil theft data, the volume of crude stolen from the country was huge.

He said, “On the quantity of oil being stolen from Nigeria, the various figures you see are all estimated figures. There is no accurate gauge to measure the volumes of crude oil being stolen in this country because we don’t have a standard measuring system.

“But because of the recent incident of a vessel that was intercepted for allegedly trying to steal crude oil from Nigeria, we think that a measurable quantity of our crude oil is not accounted for.”

He added, “I also know that Nigeria is losing a lot of revenue from this oil theft and stakeholders are not happy with the way the cartel who are involved are handling the matter.

“It is, therefore, pertinent that the Federal Government should come out with a standard measuring instrument that will give the exact number of daily production, export consumption and the amount being reserved, as well as what we channel for local use.”

PENGASSAN recently staged protests in Abuja, Lagos, Kaduna, and Warri, among other locations, to kick against the continued theft of crude oil in Nigeria.

Also, the Executive Secretary, of Nigeria Extractive Industries Transparency Initiatives, Ogbonnaya Orji, said in an interview that the 2021 audit report of the oil sector would be ready this year to ascertain the level of oil theft across the country.

“We want to establish the quantity of crude that is produced, how much of that can be accounted for and how much was stolen,” he stated.

Orji added, “We should establish the amount that was exported, reserved for local consumption and how this was reserved or managed.”


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