Nigeria could lose about N333billion in crude oil revenues by year end, following the nuclear deal reached with Iran by world powers on Tuesday July 14, 2015.

The reduction in earnings will come from a further drop in crude oil prices in the international market, due to an exercabation of the supply glut, as Iran increases its crude oil exports, resulting in lower demand by Nigeria’s clients.

Crude oil prices have fallen by 9 percent from $59.81 per barrel on July 1 to $54.55 on July 14 2015. The slide was attributed to the instability in the Chinese stock market, along with the anticipated surge in oil production in the United States, as well as high expectation that a compromise would be reached on the Iranian nuclear stalemate.

At the current production level of 1.903 million barrels per day, Nigeria would have earned about $19.23 billion for the remaining 169 days in 2015 had the prices hovered around July 1 prices, as against $17.54 billion, based on July 14 prices. This will translate to $1.69 billion or N333.26 billion in loss to the nation.

The Iran nuclear deal is coming at a time Nigeria’s receipts from crude oil sale have maintained a downward trend.

Earnings by Africa’s largest crude oil producer, Nigeria, fell by 26 percent in February, to N359.7 billion, down from N486.4 billion which the nation earned in January 2015. Revenue marginally picked up by 1 percent in March to N364.6 billion before it fell significantly by 22 percent in April this year, when Nigeria made N286.2 billion.

Meanwhile, South Africa has indicated its interest to buy crude oil from Iran immediately sanctions are lifted and this has implications of less patronage for Nigerian crude. According to Bloomberg, Maite Nkoana-Mashabane, South Africa’s international relations and cooperation minister was reported to have said “If sanctions are lifted on oil imports, that’s a win-win situation and we would like to benefit from that.”

Rolake Akinkugbe, an Energy analyst with FBN Capital , said “ It’s very likely that Iranian exports will ramp up significantly over the 12 months .Iranian crude has historically been attractive in the Asian market, given the ability of refineries there to process it”.

Akinkugbe however said it’s not necessarily all immediate gloom for African producers like Nigeria, adding that while Iranian oil was offline, its supplies to Asian refiners were replaced by a mix of crude from Nigeria, Russia, the UAE, Iraq and Venezuela.

So even Iran may have to offer some massive discounts on its crude to lure back Asian buyers she said.

South Africa bought 51.148 million barrels of crude oil from Nigeria in 2014 accounting for 52 percent of the 98.87 million barrels Nigeria sold to its crude oil buyers on the African continent.

Analysts have also predicted a rise in the volume and value of deals that will go into the Iranian oil and gas sector. According to the Financial Times, “European oil majors such as Royal Dutch/Shell and Italy’s Eni have already visited Tehran, with a view to clearing old debts and paving the way for new deals.” This is in contrast to divestments from Nigeria by international oil companies (IOCs).

It would be recalled that due to reduced earnings from crude oil exports, about 23 state governments of the federation had problems paying salaries to civil servants and had to be bailed out recently by the Federal Government.

Source: http://businessdayonline.com/2015/07/us-iran-deal-nigeria-could-lose-n333bn-by-year-end/#.Va4CJtxViko

Alright...

Its high time we diversify our economy.

Agriculture and Tourism can help.

I believe this is a wake up call for a sane government to put in place necessary policies to encourage diversification of the economy. Renewable energy is a great start (Like the case of the guy using Biogas the other day that was on FP)

Also we could work on increasing our refinery capacity or building more refineries and if we have just enough to cater for our needs, we could start exporting fuel to neighboring countries like Benin, Togo etc.

Explore our enormous natural gas resources to consolidate power generation and in a cascading effect it will encourage local businesses while improving business interests from foreign governments to start manufacturing plants here. I mean we have enough natural resource to serve as raw feed.

If the Jonathan government had a modicum of foresight, they would have known that nothing lasts forever. A very wise man would have used the proceeds from the boom to work on every sector of the economy but oga instead was stealing billions to fund a dead on arrival political ambition.

May God help Nigeria.

BUT NO THIS WILL NOT HAPPEN! OUR POLITICIANS ARE OVERLY AVARICIOUS. Looking for every means to satisfy their gods which is their belly. Every bill they rush to pass into law is meant to whet their insatiable greed. But we are coming for them.

This is my opinion, bigots don't quote me.

Some illiterates like Ekiti people will come now and start shouting Snail Buhari, meanwhile Baba is still cleaning up the mess that useless Jonathan and PDP created for about 16 years.

All I know is Nigeria can never b broke. #May God bless our country.

The ones we've been losing before nko? Have we died. Abeg jare. We all know those who will loose. The poor masses.
Cos it doesn't cut down the NASS budget and the politifchians bills.

This could be the impetus we need to get it right.

When caught up in such dire straits, ingenuity is
encouraged. I see Nigeria becoming a better
country with less dependence on oil exports.

Buhari should recover all the monies he can and
plough same back into the agric sector, maintain
stable supply of electricity, and aggressively
pursue the development of the solid minerals
sector. If these can be achieved, I see no limit to
how great this country could become.

We will surely get there.

WAT IS MY PROBLEM WIT DAT? like dey will give me part of the money if they didnt loose.

Well, that's what you get when you refuse to diversify your economy

Dnt worry the president is still with Obama, they can revert d bill at anytime

Nawa

Sometimes I wonder if without oil, Nigeria would have been a better country

Oil seems to be the root cause of all our problems in Nigeria. . Most corrupt practices stem from oil or oil revenues. ...

I hope things get better and we open our eyes to other natural resources God has endowed us with.....

.

MarvellousGod:

You dey book space abi you dey cry?

o

Baba is working

we are in for hard times

I BLAME BUHARI FOR THIS

Happy Day!

We can use groundnuts from the North as substitute...

I think God loves Nigeria so much.


We are blessed with everything we need: Crude Oil, Fishes, Coal, Enormous Mineral Resources, Agriculture, Highest Population in Africa, Tourism, Intellectuals, Engineers, Professors.....etc. The list is endless.


Nigerians were living comfortably prior to Crude Oil discovery, so why depending so much on Oil? Why not harnessing other Mineral Resources?


Currently, Singapore is the HIGHEST producer of Palmoil in the World. Meanwhile, they collected some seeds from Nigeria some decade ago for trial.


Agriculture (Mechanized Farming) and Fishing alone would create jobs opportunity and boost our revenue generation.


Enough to this Oil wahala, biko.....

Scrypt:



You dey book space abi you dey cry?

I dey cry for Nigeria. . I see #350 to $1

Pains of running a mono economy. . I hope we learn soon...

fd

It's well.
Guys We need a plan B

this is the right time to diversify our means of revenue. let's improve agro allied, tourism and local production.

True federalism is the Answer

If all opec member states can agree and balance d oil output i think d value of oil might still rise up.

wow..dat good

Dr Sid's Sister Tobore Weds French Beau Photos

SaiBuharii:
Some illiterates like Ekiti people will come now and start shouting Snail Buhari, meanwhile Baba is still cleaning up the mess that useless Jonathan and PDP created for about 16 years.

Lol snail baba

Where do you see all these :DWhere do you see all these