₦airaland Forum

Yes OP

Not looking good.

See my signature.

Standing5:
So what is driving our production cost up?

cost of production increased with price oil in recent years, service companies, fund providers set contract prices and return on investment (Interest etc ) based on prevailing price at that time, so paying the contractors per contract now is main driver of high cost when bench-marked with present oil price. production cost did not change, but revenue that justified fixing that cost has reduced tremendously.

Too bad

Emekamex:
Why waste money on oil production if it is no longer profitable?

In the near future oil prices might jump back to a record high. Economists reassure oil producing nations to keep producing and stockpiling while waiting for this to happen. Don't forget Nigerians always say "no condition is permanent".

I wonder why Lai Mohamed has not blamed GEJ for this.

sdindan:
And my man Buhari is looking for oil in lake Chad. Kontinu,!

so u think things will remain like this forever.

Lies. No, I repeat NO country will produce at a loss..

The cost of production is not that high.

great664:
Sai Baba its time to stabilize World Oil Price o. That was your Promise to your Zombies...

Yet the Dullardhino from Daura don approve Billions for exploration in the north when oil price not favourable.

Ministry of Information Budget is higher than Ministry of Agriculture, that shows all they care about is PROPAGANDA

You can't be wicked and expect to receive Gods Blessing. When GEJ was there oil price became favourable now that the Dullard is there oil price dry up.

This same scenerio happened in my LG, when the wicked former chairman was there, no oil was found even after Billions of exploration, the coy pack up and left but when the new chairman was elected, oil started flowing everywhere and many rigs/oil wells where build in space of 4months.

You will continue to suffer and oil became extinct until you leave office

Why are you people from the other side of Niger so insultive and full of hatred for PMB. Let me tell you this, change is already here whether you like it or not. You people were given rare opportunity to govern the country when oil price was more than $100 per barrel but see the mess you put the country and yet you are so disrespectful to the person who is trying to fix the mess. Posterity will never forgive you people, afterall you didn't vote for him and yet you wanted to be the greatest beneficiary - what an irony!

Emekamex:
Why waste money on oil production if it is no longer profitable?

Dem nor go hear nah the UK govt are scrapping some oil wells as we speak.the ones on the north seas.

og2711:
Lies. No, I repeat NO country will produce at a loss..

The cost of production is not that high.

Says who?

Well, with the dropping oil prices I see our government has decided to act like non-producing developed nations and increase taxes while introducing new charges on the masses. A burden to the average salary earner but at least a way to cushion the blow on our economy. I do not like the idea but it's a welcome step to the much touted economic diversification.

Why won't Nigeria produce at a loss. We import virtually everything used in oil & gas sector, and these imports are over priced. The corruption in the oil and gas is a cartel. Its worse than #Dasukigate. Govt should look into it.

serious problems for marginal field owners who spend much on enhanced oil recovery methods to produce oil..this might lead to a lot of job losses which isnt good news..oil pipeline vandals...buhari and his team should adopt true federalism and let niger deltans handle their fellow niger deltans...

Guy u go asso rock go stay now..shey na u vote for am.

Truly1:
Why are you people from the other side of Niger so insultive and full of hatred for PMB. Let me tell you this, change is already here whether you like it or not. You people were given rare opportunity to govern the country when oil price was more than $100 per barrel but see the mess you put the country and yet you are so disrespectful to the person who is trying to fix the mess. Posterity will never forgive you people, afterall you didn't vote for him and yet you wanted to be the greatest beneficiary - what an irony!

Truly1:
Why are you people from the other side of Niger so insultive and full of hatred for PMB. Let me tell you this, change is already here whether you like it or not. You people were given rare opportunity to govern the country when oil price was more than $100 per barrel but see the mess you put the country and yet you are so disrespectful to the person who is trying to fix the mess. Posterity will never forgive you people, afterall you didn't vote for him and yet you wanted to be the greatest beneficiary - what an irony!

Take your frustration elsewhere Mr. Enjoy your change, why blame people who complain of not seeing the change just like ur master always blame past admin... Am I not entitled to my opinion? Or when you were insulting GEJ did I ask you to stop. GEJ did not use my N50 to feed his family nor buy BMW for his govt, so while won't I complain when after paying tax, I will still pay N50 on each transaction just to satisfy the few corrupt people? May thunder fire you next time you quote me to stop "Wailing"

For your info , I am not from across the Niger. Fucking Mofo

I still think adding value to crude oil is a way out of this predicament. If the refineries were working, more revenue would been generated from local consumption and even from sales of refined products to other African countries. Consider other by-products of petroleum that would have been used in allied industries. From polymer for polythene bags and plastics to derivatives for detergents, greases and lubricants all of these are presently being imported. Our chemical industry is under developed and as a result of this, importers will continue to drain Nigeria Forex to get these products in.

AFCON AND ELEME petrochemical was meant to do all of these, jobs would have been created and other related industries would have been established.

Fertilizer production is a totally different issue. At this time when every body is talking about agriculture as alternative source of revenue, Nigeria can no longer depend on importation of fertilizer or its raw materials. This is the time to look inward and optimize available local contents which are abundant as petrochemical products.

Liquefied Natural gas is another product that is being underutilized. What happens to taking a cue from the practice in other places, where gas utility companies effectively distribute this gas to every home and charge per use. This would save an average house hold considerable amount of money, which translates to more spending power.

Sai baba

erico2k2:
Says who?

Talk to real experts in the oil sector. No one will even produce at less than 100% profit ($22 per barrel). Nigeria is between $11-14 to produce. These oil companies hype up the price to defraud our clueless government as they are the ones who pay the exploration costs..

del

jpphilips:
Your submission is applicable to some countries not all, that theory is not sacrosanct for every producer, your source greatly depends on your need, if you have light crude refineries and vice versa, it is difficult to change it over night because your supply has stopped, rather they source for other markets. The conversion technology is not cost efficient either.
Sourcing for other markets outside your comfort zone attracts huge logistics cost and security concerns along delivery routes.

Saudi Arabia is surrounded by producers all of which target nearly the same market (Asia and Europe), faced with similar territorial challenges. Iran was out for years only to bounce back recently with devastating market glut, how did Iran reclaim its market share so soon??

What will make Asian countries buy from American markets on a good day when there is oil in the middle east? what cost does it attract? they may choose to do it in times of crisis , not when the going is good.
When the US peaked an overwhelming 11mbopd, they gave up their Nigerian market share, India took it, as soon as Iran bounced back, India ran to Iran immediately, go and check the distance between Iran and India compared to Nigeria, then you will understand why Nigeria became a forgone alternative. There are so many factors that maintain oil market share, I only highlighted a few.

Noted.

Emekamex:
Why waste money on oil production if it is no longer profitable?

Think macroeconomic and not microeconomic.

Do not cry for the Naira fall...
It is either I do not understand economics and how exchange rates work or a vast majority of us Nigerians still don’t get how we have wrecked our country with our own curious choices. Just this morning I was listening to the radio and the lady on air went on and on about how she thought CBN governor Godwin Emefiele was incompetent and should be sacked because the naira was now exchanging at 309 or so to the USD.
That view pretty much echoes the sentiments expressed by many people I know and it amazes me that there are Nigerians who actually think there is some magic POLICY that can make the naira strong in the near term. If my economics and my understanding of the way the world works are right, then that is as far from the truth as Jesus Christ is black.
The simple fact of the matter is that apart from oil that accounts for over 90% of our revenues, we really don’t have much of an economy. We hardly produce anything, we import even toothpicks, so exactly what policy is going to be implemented that will turn Nigeria into a top exporting economy in the near term? Where are our Apples, IBMs, Disneys, GMs, General Electrics, Coca Colas, Empire State buildings, Statues of Liberties, Lockheeds, Citibanks, JP Morgans, ExxonMobils, NBAs, Super Bowls etc?
Let me bring that closer home. There was a time long ago when Nigeria had a truly strong economy and the naira was one to the dollar - even exchanged for higher than the USD, but that Nigeria is not this Nigeria. Sadly that Nigeria was laid by the British, and this Nigeria (if you don’t believe in the nonsensical imperialist conspiracies like me) - fueled by the DAMAGING Indigenisation Decree, has been the creation of us Nigerians.
Back then we had a booming economy. We were either the top, or among the top exporters, of timbre, cocoa, groundnuts, rubber, palm oil, etc, in the world. Nigerians not only holidayed at home in their villages, at Yankari Games Reserve, at Obudu Cattle Ranch, at Oguta Lake, at Ikogosi springs, at Gurara Falls, at Mambilla Platueau, etc, we attracted international tourists who brought in loads of foreign exchange. Even Nigerian schools were foreign exchange earners because they attracted foreign students. We had different car assembly plants - Peugeot, Volkswagen, Anamco etc. Nigerian government officials only bought vehicles assembled in Nigeria for official cars. We had a thriving sports industry. We were not Man United or Chelsea fans, we were Rangers or IICC fans. We had the Nduka Odizors, people made money from sports.
We also had companies like Lennards and Bata producing school shoes in their thousands, we had the thriving Nigerian Airways and the Aviation School in the north that produced some of the best pilots in the world. In those days if you were brilliant you were respected much more than the crass money-miss-road contractors of today. Most of the Aje Butters I knew had fathers who were university dons. Back then it meant something to ‘know book’. Our textile industry was alive and well. Just recently I watched a news report on the textile industry in Nigeria on CCTV News. Though the main focus was on the comatose status of the industry, I was stunned by the gigantic Kaduna Textile Mill built in 1957. I could go on and on.
Today however, no thanks to our parents (and we must call them out the way Wole Soyinka did his generation) and many of us (and we should be remembered for failing our children if we continue like this), we have destroyed everything. Today for instance Nigerian football (which comes easy to me obviously) doesn’t appeal to us, we have to fly across thousands of miles to watch ‘our’ clubs play. Every year we collectively burn billions of naira being fans of clubs that give us nothing back, but some ‘entertainment value’ - simple pleasures for which we are ready to destroy the future of our children. Well people, payback time is here.
Even with our ta-she-re money we all want to wear designer clothes and carry designer bags, Armani, Givenchy, Louis Vuitton etc. We all want to drive jeeps with American specs, our children must now school overseas and acquire the necessary accents to come back home and bamboozle their ‘bush and crass’ contemporaries that they left behind. Who holidays in Nigeria anymore, is there Disneyland here? No one buys made-in-Nigeria school bags for their children, after all no Superman or Incredible Hulk or Cinderella on them. We are no longer top exporters of anything and the demise of oil means we have zilch... zero.
A country of 170m fashion-conscious people has no textile industry. We take delight in showing how our made-in-Switzerland Aso Ebi is different class to everyone else’s. When we help our musicians grow and pay them millions, they repay us by immediately shipping the monies overseas to produce their “i-don-dey-different-level”music videos. It makes no difference that distinctly Zulu dancers are dancing to a Nigerian highlife song. As stars concerned they also wed and holiday overseas to impress us all. All the musicians who acknowledge their Ajegunle roots now speak in a cocktail of strange accents to symbolise how much they have blown their monies overseas.
Were we a more serious people, the highly popular Kingsway Stores of the past would probably have a thousand outlets pan Nigeria today supporting a massive agriculture industry among others, but today we have the likes of SPAR, Shoprite, dominating the retail industry while Kingsway is dead. And we Nigerians make it a special point to shop from the Oyibos who have ‘cleaner shops’, ‘better this and better that’. For our personal pleasure we don’t mind them dominating us in our own backyard and shipping proceeds overseas.
I could go on and on, but I don tire. Even as you are reading this, stop for a moment and look around you. What you see will probably explain why we are lucky it is not N1000 to the USD yet. And don’t think for a moment that it cannot get there. Just continue to wear your Armani gear and Swiss-made lace, continue to spend your money on Man United, Arsenal, Chelsea and Barca and encourage your children to do same. (My article tomorrow in my Saturday column in This Day is on the Nigerian champions Enyimba FC - Nigeria’s most successful club - not having a sponsor, yet Nigerian brands pay over N600m to Man United and Arsenal for sponsorship to impress us.) Ehhh, no problem, continue to tell me the NPFL is rubbish or the clubs should clean up their act if they want sponsorship, mo gbo.
Don’t curtail your interest in choice wines ( we were the number one champagne consumers in the world in 2015), continue to love your American specs, cheer the education ministry for letting schools sink to pitiable levels, don’t fight them to improve our schools, don’t chide them for letting schools drop Nigerian history and embrace British, America and whatever else curricula. Carry on with your love of French wines and Chinese silk, don’t bother about Jamiu Alli when there is Roger Federer. Stock up on your Italian, American, British products which you cannot live without, including the ‘baby soft’ toilet rolls produced only in that small unique village in England - the days are long gone since you were a broke student who used wet newspapers to wipe your butt. Don’t even consider holidaying in Nigeria, it’s too dangerous - you have to fulfill your dream of being Nigeria’s Henry Ford. Don’t listen to people like me who have a wardrobe full of only cheap adire that is actually cheaper than just one of your Tom Ford blazers. Please keep dressing in fine silk made in some exotic place so you can be addressed accordingly.
Finally keep letting corrupt leaders who have looted your commonwealth and shipped all the monies overseas get away because to attack them does not fit your political narrative. Let us continue with the fine life, let us all continue to work for Oyibo.
But don’t forget that there is payback time and Emefiele is not your problem. Time for us all to look in the mirror and take responsibility.

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og2711:
Talk to real experts in the oil sector. No one will even produce at less than 100% profit ($22 per barrel). Nigeria is between $11-14 to produce. These oil companies hype up the price to defraud our clueless government as they are the ones who pay the exploration costs..

No vex but thats palm wine bar talk right there.The big oil producer are actually scrapping their wells altogether, why do you think they are doing that? cos its not worth maintaining.The only cheap means is the new technology discovered by teh Americans shale gas etc this is the true reason the cost of oil is falling.

jpphilips:
You are right from the surface but the reality is different, what you call cost of production is different from what the companies call cost of production, the article highlighted the slim difference between cost of production and cost of extraction (what you have in mind).
Cost of extraction is relatively low owing to the corruption, self producing well and other factors, but cost of production is a diffrent ball game, let me give you a clue.

Security, those military house boats, cost of arming them, allowances, patrol and surveilance equipments etc all sum up to cost of production.
Down time accrued to sabotage, community settlement, FTO's, ROW acquisition, expansion projects, maintenance and upgrade play a role too.

well said let me add, logistics, maintenance, expedition, marketing,development etc.

Emekamex:
Why waste money on oil production if it is no longer profitable?

Because it very difficult, if not impossible for the govt of change to come up with other viable means of generating income.
Their hope has long been on "Oil!"