Oil Price Wars: Can Nigeria Survive The Fight?

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is...

Top 10 Most Expensive Universities In Nigeria

For many Nigerians, high-quality higher education is a luxury. There are many private universities who are known not only...

List of Mobile Phone USSD Codes for Money Transfers for All Banks in Nigeria

As technology evolves, the financial sector is not left behind, Several softwares have been developed to make banking easier...
Oil Price Wars: Can Nigeria Survive The Fight?Oil Price Wars: Can Nigeria Survive The Fight?

2020 has been whirlwind for the global oil market, following the outbreak of the COVID-19 virus, which has hampered oil demand from one of the largest consumers of oil – China (13.1% of world demand). With the virus spreading across other key demand regions – Europe (14.4%) and United States (20.9%) – the outlook for oil prices is weak. While relations among OPEC+ was meant to provide support for falling oil prices, a failed agreement turned into a full-blown price war, with major oil producers offering significant discounts on their April Official Selling Prices (OSP).

In response to the lower global crude prices and to push out unsold cargoes, the Nigerian National Petroleum Corporation recently cut its April official selling prices (OSP) for Bonny Light and Qua Iboe, to dated Brent minus $3.29 and minus $3.10 per barrel, respectively. With Dated Brent currently at $26.8/b, a rough estimate shows that Nigeria will be selling Bonny Light crude for about $23.5/b and Qua Iboe crude for $23.7/b.

Read:  MPC Meeting: Tough Choices?

Oil Price Wars: Can Nigeria Survive The Fight?

While the slash in crude grades might push out existing volumes, this reduction in price will hurt Nigeria’s future revenue coming from the NNPC. For context, Nigeria’s cost of production is estimated between $20.0/b-$23.0/b, which puts the current pricing at barely breakeven. Also, with other oil and gas operators in Nigeria exposed to the declining prices, royalties and taxes received by the government will come under significant pressure. In all, oil revenue in 2020 would not only be challenged but also significantly lower than the previous years.

- Advertisement -
Read:  Airtel Offers 100% Value Of Recharge As Bonus

United Capital Research

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

Poly Introduces Powerful New Partner Program

Poly Brings the Award-Winning Polycom and Plantronics Partner Programs Together for Innovative Program Built on Best Practices  SINGAPORE - Media...

New Quarter-Turn Fastener from Southco Designed for Use in Tight Spaces

HONG KONG, CHINA - Media OutReach - 8 April 2020 - Southco Asia Ltd., a subsidiary of Southco Inc., a leading global provider of engineered access solutions such...

DHL Express ranked as Best Workplace in Asia by Great Place to Work® for second year

World leader in express logistics takes top spot in "Multinational" category for the fourth time since 2016DHL Express has received 53 different awards for...

Zenith Bank Introduces Automated Voice Banking Service

Zenith Bank Plc, Nigeria’s leading financial institution, has introduced an automated voice banking service, an interactive voice response (IVR) solution which enables customers to...
- Advertisement -
BrandsPur Weekly Cartoons
%d bloggers like this: