Kachikwu: Nigeria will need to produce 3.1mbpd to catch up with budget 2016
Ibe Kachikwu, minister of state for petroleum, says Nigeria would need to consistently produce about 3.1 million barrels of crude oil per day to catch up with the budget 2016 oil benchmark.
When the budget was signed into law, Nigeria benchmarked it against a production capacity of 2.2 million barrels daily, but has fallen short of that since February.
Kachikwu, who spoke to Richard Quest on CNN’s Quest Means Business, said the country would need to produce as much as 900,000 barrels of more crude per day to cover for lost crude and to meet budget 2016 benchmark.
“It is a difficult time, production is about 1.5 million barrels a day, but we intend to get that up. We are putting a lot of energy around it, a lot of dialogue, a lot of engagement, a lot of security meetings to try and resolve it,” Kachikwu said.
“President Muhammadu Buhari is very concerned about these things, a lot of executive time is being given to this. We are expecting that over the next one month, two months, we would find some final solution that would bring production upward.
“Beyond that, the reality is that we have lost a lot quite a lot of months, about five, six months of continuous problems. so it is going to be difficult to catch up with the 2.2 million barrels on which the 2016 budget is based.
“But we are certainly going to try, once things are calmer. We need an average of 900,000 barrels per day, excess production to catch up. That is going to be very tough, but we are going to work on that.”
The Organisation of Petroleum Exporting Countries (OPEC) quota prevents member countries from exporting all their output.
Kachikwu said he is does not think OPEC meeting in Algeria in September, can upturn crude oil prices on the globe.
He said OPEC only controls only 30 percent of global oil produced, stating that OPEC would have to meet with the other 70 percent producers to deal with oil market instability.
Mr. Kachikwu is the Minister of State for Petroleum, it is ok for him to think that only Petroleum production will solve Nigeria budget problem. This is the orientation of ALL Nigerians today. That is why there is problem in the Niger Delta. Even if the Minister can produce 3.1 mb/d, OPEC will not let him export it. It remains a dream for the Minister to think that he can produce 2.2 mb/d from the current 1.5 mb/d. assuming that Niger Delta becomes peaceful, 2.2 mb/d will remain a mirage to Nigeria. It is also a waste of resources and time to start dreaming that there are petroleum products in Chad Basin and Bauchi Trough. For all the drilling activities that took place in Chad Basin (1984 – 1998) I doubt if anything was found. It was called Political drilling. The drillings that took place by Snepco, Chevron and Total near Yankari games reserve, did not produce the result that will encourage the world players to remain in this region, else they will be there today producing the black gold. Now the Northern 19 States want to spend their scarce resources to look for what experts could not find, you can see the type of Leaders that run this area. This is why development of the area cannot be achieved. With the alternative energy springing up everywhere and every day, people should learn to be less dependent on fossil fuel. The sun shines for at least 12 hours every day of the year in any part of Nigeria. With Government subsidy, 50% of Nigeria homes can be on Solar Energy. Government can create off grid communities that will be permanently off Solar Power. Nigeria should look elsewhere to bridge the budget short fall as the result of low crude price and low daily crude production. Government and private partnership can create sustainable enterprises that can move the country away from crude oil dependency. Nigeria’s candle is burning at both ends. The Finance Minister should work with the Oil Minister of State and the Nigeria Economic think tank (I am not sure if we have one) to look for revenue elsewhere. The States should not depend on the hand outs from Abuja. They should be self sufficient. Any state that is NOT self sufficient should negotiate with its neighboring state and arrange for a mutual agreement to merge into a self sufficient state that can its staff full salaries on the 26th of every month. It is shameful for state Governors to blame another person(s) for their inability to perform. When you cannot run your state independently without a handout, why did the Governor vie for their offices. During the election campaign, where do they think they will get money to fulfill their promises? Next time, before you vote for anybody, ask him (her) where he or she will get the fund to run the government. Most of our leaders have no clue of how to generate fund. They are very weak on economics. If one million people contribute N1.00, that will be one million. If they contribute one thousand, that is one billion. Imagine what one billion can do!!!. Leaders, wake up.