LRNZH:
Almost half of Nigeria’s cargoes due to be exported in January are still available, Reuters has reported, even as oil prices reach the $50s trough, almost $10 below Nigeria’s benchmark price.

The backlog has pushed Nigerian oil differentials versus Brent to their lowest since at least 2009 BFO-QUA at 65 cents a barrel, down 80 per cent since May, said Reuters. And it is also creating a discount frenzy between African and Gulf oil producers to Asian buyers.

Asia has become a hotspot for a price war between African and Gulf oil producers who, hobbled by bulging global supplies and waning demand, are offering steep discounts to defend their market share in the world’s top net crude buying region.

The competition is welcome news for Asian buyers. If oil stays near $60 per barrel, import costs for the world’s second biggest oil consumer, China, would drop to under $125 billion a year, versus $222 billion in 2013 when crude averaged $110.

But for producers, it means more competition, and African sellers like Nigeria and Angola, faced with precarious finances due to plummeting oil prices, are struggling to make inroads into Asia, a Middle Eastern stronghold.

Owing to the frantic competition for Asian buyers, India, THISDAY learnt, has taken the unusual step of asking Nigeria to offer it a 90-day credit line if it must continue to buy her crude oil.

With the loss of the US market earlier this year, India has replaced it as Nigeria’s biggest buyer of the country’s light crude grade.

“There is competition between West African and Middle East suppliers for the Asian markets, but the Middle East suppliers have the cost advantage,” said Philip Andrews-Speed, head of Energy Security Division at the National University of Singapore. The city-state is a major oil trading hub in Asia.

Low operating costs in Saudi Arabia, Kuwait and the Emirates already allow these countries to offer hefty discounts.

Now, a more than 50 per cent jump in freight rates between West Africa and China since September is adding to the relative advantage of Middle Eastern grades, which require shorter shipping distances to Asia. This has been a big setback for West African producers.

West African exports got a brief boost in August when Brent’s premium to Middle East crude DUB-EFS-1M narrowed to less than $2 per barrel from almost $5 in June. But with Middle Eastern producers now offering even more competitive prices, the advantage has faded.

“A year ago, a $2 premium would have been attractive, but in today’s environment it’s different,” a trader dealing with West African crude said.

West African producers traditionally sold most of their oil to North America and Europe, but exports dwindled given a gusher of shale oil from the United States and higher output from nations outside the Organisation of the Petroleum Exporting Countries (OPEC).

West African crude exports to Asia rose more than 4 per cent between January and December, Reuters data has shown. China accounted for most of the rise as it took advantage of low prices to build up oil reserves.

But the higher West African arrivals into Asia were mainly due to sales before October, and have dropped since then due to Middle East discounts.

Middle East producers continue to dominate the Asian oil market, with Saudi Arabia, the United Arab Emirates (UAE) and Kuwait all increasing shipments to the region since 2012.

The Middle East accounts for around half of China’s imports and Africa has a 25 per cent share.

With pricing an advantage for Gulf producers, one hope for West Africa is China’s drive for diversification in order to avoid over-reliance on Middle Eastern oil, JBC Energy said.

But analysts are sceptical about the sustainability of steep discounts, as producers need higher prices to finance their budgets.

“Governments that underpin their budgets with oil or metals have seen currency values plummet, reserves erode or current account deficits rise… Regimes built on oil wealth will come under pressure,” risk consultancy and insurance brokerage JLT Group said in its 2015 outlook.



http://www.thisdaylive.com/articles/nigeria-struggles-to-sell-oil-cargoes-offers-discounts-to-asian-buyers/198070/

kart042000:


President Jonathan would only seek your counsel if you have a voodoo to make him win next years election.

All you listed are truely a road map to progress if it can be followed, but unfortunately i dont trust your gej to follow it because he has not implemented a single result from all the money sharing committees he has raised in the past.

Better channel your energy to a new person to win who is willing to bring change and respect of value and life for each Nigerian citizen. I believe buhari/Osibanjo will deliver the true results of democracy, and if they dont, we kick them out in 2019 by our thumb.

Unfortunately for them they would need to work extremely hard because the debt Nigeria is in is large, external reserve as been depleted, oil price as dropped. Atleast the diversification we are shouting and craving requires investors, and the government needs money to manage and sustain other sectors.

God help us.

ogbonoeba:
Will shale oil destroy Naija?
If the Americans develop technology to produce oil at less than $50/barrel and sell to Asia, what will Nigeria do?

WhiteTechnology:


You are wrong

The efforts of a good leader is wasted by a system prone to corruption

Eg

Jesus was a good leader but his financial treasury was looted by Judas but no one knew except Jesus because he has divine powers.

If Judas had been told to reveal on a daily basis the financial activities of the ministry, he would have being exposed earlier or he won't have stolen due to the accountable system being operated.

appini:


When NOI was telling the state governors that the federal govt need to save some funds for the rainy day; the same APC governors champions the revolt against GEJ that the rain was already falling in Nigeria that the money should be shared immediately.

You cannot eat your cake and still want to have it.

WhiteTechnology:



Simple

There are several ways

1) Tell our law makers to amend the constitution to include this

2) Through a Confab. Unfortunately the far North insisted on retention of status quo

3) Insist the President find a means to achieve this through the National Assembly

4) The most important is to keep reminding Nigerians these points since we have short memory

cyunited:


And what if the leader himself is corrupt or shield corrupt people?

In d case of d bible like you rightly quoted,Judas was d corrupt one n he was not shielded!

in d case of Nigeria both Jonathan n his cohorts are corrupt n he shields them also, take pardoning Alamiesiha for example, Stella oduah's case,Diezani Allison madueke,missing $20 billion just to mention a few!if these monies were not wasted n allowed to be in the hands of a few Nigerians in d guise of stealing is not corruption, we would still had something to fall back on now.

In as much as you are aspiring to be an adviser toGEJ anywhere,whether in Aso rock,or Otuoke,always try to tell him d truth,it will give you a good name n also give our children a better future!!

WhiteTechnology:



Unfortunately Buhari and Osibanjo do not believe in these points listed below


1) Resource Control

2) Fiscal Federalism

3) Privatization

4) Political Federalism

5) Decentralization of Nigeria

6) Restructuring of Nigeria

6) Institutions giving detail account of their financial/other activities to the public through their websites/panels for public scrutiny every 3months.


Which are the fastest route to

I) economic diversification,
ii) citizenry prosperity
iii) political stability
iv) reduce corruption


These 7 points are the basis of True Federalism which can help Nigeria become a Super Power and a first world Nation.

iwriterng:
I know this may sound selfish, but I can't help but pray this oil crisis would last for the next two years, I pray the price drops to about $40 - $20 per barrel. I really do.

I know it will be a hard time for us as a country, but then, there would be nothing to loot for our so called leader, and with that, they'd be forced to diversify our source of income or die in penury.

Lord, please let it last for a while, until our leaders start using their head.

bushdoc9919:


Oh I am a beleiver in Agric. But...the problem is that there are so many countries doing it...that the financial returns will not be high enough.

Take cotton. Many other West African countries grow cotton...and they have to compete with cheap cotton from abroad. As a result...they don't earn much from it.

Palm oil? The kings of palm oil are Malaysia and Indonesia....countries that in 1960 were nowhere near us.

Cocoa....we are number 5....when in 1977 we were number 2. Now Ghana, Ivory Coast and Brazil are beating us.

We should prepare short term for belt tightening...and long term for industrial development. Because.....I don't see Agric saving us...not when prices are low all the time....no thanks to better production methods.

WhiteTechnology:



Good point

But unknown to you, every past leaders protected their tribesman

Eg Buhari placed Shagari under house arrest but put Ekwueme in prison


So you see that our ethno religious sentiment is an impediment to anti corruption

donpeey22:
I am not implying that we should rely on Agric. All I am saying is that we can still package our agricultural products very well and tap from the sector to improve our economy.
If we can compete with other oil producing Nations in the oil market, why can't we do same in the Agric sector. Let us improve our production and packaging methods for all our Agric products and go into the market, I believe we will do well.

bushdoc9919:


Buhari also jailed a lot of Northerners (one of the Northerners he jailed was the first Nigerian VC of my alma mater...and Shagari's Foreign Affairs Minister....the man was in jail...not in house arrest.). He also freed one politician...a Southerner(Pa Michael Ajasn...Bola Ige too almost got freed...if not for some fresh charges brought against him). And he almost got Dikko (something which the man has not forgiven Buhari for up till now).

betterabia:
Saudi arabia is behind all this;


they are the major sponsor of boko haram
they don't want a christian as nigerian president
they refuse to allow nigeria bring in arms from pakistan

WhiteTechnology:



Good point

But unknown to you, every past leaders protected their tribesman

Eg Buhari placed Shagari under house arrest but put Ekwueme in prison


So you see that our ethno religious sentiment is an impediment to anti corruption

WhiteTechnology:



But he treated Shagari like a prince but treated Ekwueme as a slave


True or False

CzarChris:
What I don't understand is why we are not refining our crude. Ask anybody who is grounded in the industry will tell you that it's cheaper to refine than produce, if only we can start refining our oil, the internal market is more than enough to take care of any budgetary expenses plus the employment it will generate.

bushdoc9919:


Well....if we want to rely on agric....

1) Increase funding for our agric research institutes.

2)Large scale farming...large scale MECHANIZED farming (which is what Saraki of Kwara brought some white Zimbabwean farmers to start in Kwara some time ago)

Caseless:
what has he been doing in 6 years, diversifying or destroying the economy that you think he would do otherwise next year?
We gave him six years to diversify the economy, he failed to do that. Just expect him to be kicked out next year.

CzarChris:
What I don't understand is why we are not refining our crude. Ask anybody who is grounded in the industry will tell you that it's cheaper to refine than produce, if only we can start refining our oil, the internal market is more than enough to take care of any budgetary expenses plus the employment it will generate.

duni04:

Buhahahahahahaha!

bushdoc9919:
Here is what Nigeria needs to do....from the experts...

From the article :Pass the books,hold the oil

It is a curse. There are many other things we can do besides oil and gas.







And from Field Ruwe...



So instead of blaming the Hausas/leaders/Igbos/Yorubas/Muslims/Christians/etc...why not blame your unnecessary addiction to oil?

Nigerians.....stop talking about Resource control, Sharia, GEJ VS Buhari, and all that.....and focus on education...and getting our leaders to get us there. Use that school for something!

Oil is a curse.

bushdoc9919:


Don't make me laugh.

Yes Saudi is behind this...because America's domestic oil produciton is increasing...so much so that there is a glut in the market...keeping oil prices down. The Saudis are worsening the glut (by increasing OPEC production quotas)....so that the American oil producers go out of business....and the Saudis can rule supreme again as America's cheif oil supplier (and remeber....the Saudis too are suffering as well).

Plus....there are a lot of countries now producing oil that were not doing so three decades ago. Add ISIS in Iraq selling oil at rock bottom prices....and you have the reason why prices are low.

Nothing to do with Saudi hate for Jonathan.

That is why Nigeria must get off oil We cannot rely on oil any more. Best to follow South Korea and Japan and industrialse.

betterabia:
Saudi arabia is behind all this;


they are the major sponsor of boko haram
they don't want a christian as nigerian president
they refuse to allow nigeria bring in arms from pakistan

betterabia:


instead of waiting for the economy to be destroyed by the current oil price fall, why can't the govt move away from oil and give attention to another thing.

betterabia:


instead of waiting for the economy to be destroyed by the current oil price fall, why can't the govt move away from oil and give attention to another thing.