Both political and economic factors…
The number of active oil…
In a bid to prevent oil thefts and curb revenue losses, Nigeria will start tracking this year the volume of its crude oil output and sales volumes and destinations, oil minister Emmanuel Ibe Kachikwu said in an address on the 2017 outlook for Nigeria’s petroleum sector.
“This year, we are going to commit to try tracking our oil so that from the moment one molecule is produced to the time it is sold and where it is sold, we will be able to track that and if we do that, we envisage billions of dollars in savings for the federal government,” Kachikwu said.
Oil theft has been just one of Nigeria’s oil industry problems in recent months. The country’s crude production has been severely crippled by militant attacks in the oil-rich Niger Delta to the point that Nigeria was exempt from OPEC’s production cut deal from November 30. Low oil prices and reduced domestic production have also battered Nigeria’s economy, which is highly dependent on oil export revenues.
Related: UAE Oil Minister: Too Early To Say If OPEC Deal Should Be Extended
Now Nigeria is aiming to increase its crude oil production and seeks to achieve lasting peace, Kachikwu said last month, adding that the country’s oil output had reached 1.8 million bpd. This recent production rate is higher than the average 1.63 million bpd in the third quarter of 2016, but still 400,000 bpd below the peak of 2.2 million bpd before the militant attacks on oil infrastructure started in the Niger Delta.
In this week’s address, minister Kachikwu also said that he would prefer long-term contracts for crude oil loadings compared to the current short-term contracts. Switching to longer-term crude deals would create contract certainty regarding the sales of Nigeria’s oil, the minister noted.
Just last week, state-held Nigerian National Petroleum Corporation (NNPC) said it had awarded the 2017/2018 crude oil term contracts to 39 companies to lift 32,000 bpd each and an NNPC unit to load 90,000 bpd.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…