.As crude oil price hits $79 per barrel
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has stated that the federal government has proposed a legislation that will clarify the National Gas Policy and treat gas as an independent commodity, rather than a by-product of crude oil production.
This is coming as crude oil price touched $79.47 per barrel briefly on Tuesday supported by concerns that US sanctions on Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East.
Speaking on Tuesday in Lagos at the 2018 Brand Innovation Conference, tagged “LightUpNigeria Conference,” which had as its theme “Repositioning the Energy Sector for Growth,” Kachikwu said the proposed gas legislation would tackle gas commercialization and set clear rules on gas activities from the upstream, midstream and downstream sectors.
According to him, the legislation will also herald a simplified but clearly defined licensing administration, which will regulate the licensing of operators in the gas value chain.
Kachikwu who delivered a keynote address on “Scaling the Nigeria Energy Hurdle: Delivering Energy for Development and Growth – Issues, Challenges, Gaps and Opportunities,” noted that natural gas will be an essential part of the future energy mix as the world moves to a low carbon future.
The minister, who was represented by his Senior Technical Adviser, Gas and Power, Mr. Gbite Adeniji pointed out that opaqueness and inefficiency has always been a characteristic that negatively plagued the petroleum industry.
“These were known to demotivate investors, and Mr. President mandated for a new push for efficiency in all sectors and we portrayed this, via out determination to reduce the cost of oil production and contracting cycle. We identified the root causes of the high $32 per barrel production cost and 24 -36 months contracting cycle via inclusive consultations with stakeholders and then began implementation of solutions. Progress is evident by the reduction of both technical costs and contracting cycle and also increase in Foreign Direct Investments (FIDs) into the country,” Kachikwu said.
In her welcome address, the convener of the conference and Managing Partner/CEO of Brandzone LLC, Chizor Malize, said the theme of this year’s conference was selected to reflect the fundamental changes to the dynamics of the world energy industry, which the Nigerian oil and gas industry needed to align to.
She noted that energy is the basis for industrial and economic activities as it provides an essential component for almost all human activities.
In a related development, as crude oil prices were boosted yesterday by concerns that US sanctions on Iran would reduce the country’s crude oil exports, the prices, however, remained capped by concerns that China’s economic growth may be slowing after the major oil consumer reported weaker-than-expected monthly data.
The global benchmark, Brent crude oil reached an intraday peak of $79.47 a barrel, up $1.24 and its highest since November 2014, before retreating to $78.37.
The US light crude was 20 cents lower at $70.76 a barrel, also not far off its highest since November 2014.
According to Reuters, China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade dispute with the United States.
Despite these downward forces, the oil market retains support from OPEC and other producers’ production cuts and US sanctions on Iran.
World oil prices have surged by more than 70 per cent over the last year as demand has risen sharply while production has been restricted by the OPEC, led by Saudi Arabia, and other producers, including Russia.
The United States had announced it would impose sanctions on Iran over its nuclear programme, raising fears that markets will face shortages later this year when trade restrictions take effect.
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