Home » Business » BigWin 7: Saving Nigeria from volatility, vagaries of global oil market
BigWin 7: Saving Nigeria from volatility, vagaries of global oil market
By Michael Eboh
The Nigeria economy, had for many years suffered from the volatility and vagaries of the global petroleum industry, with development in the global scene determining the shape of things in the country.
The uncertainty in the international crude oil market cost the Nigeria billions of lost revenue, depriving the country of funds to grow its economy, diversify the economy away from crude, fund its budget, while also depriving the country the benefits of the resources.
However, today, the Federal Government has understood the advantage of playing an active role in the global petroleum industry, and had jettisoned passivity that had cost it billions of dollars.
It is pursuing this initiative through the 'Big Win 7: international energy relations and coordination.'
Specifically, the Federal Government hinged its new approach to the reality that oil has become an international commodity; especially as it declared that how it is produced, how it is managed, how it is exported, how the income is tracked; issues of transparency in terms of management of that income is something that everybody in the world continues to be concerned about.
Musa: We're going forrevenge against Bafana Bafana
First among its foray into the international crude oil arena, the Federal Government became an active participant in the Organisation of Petroleum Exporting Countries, OPEC, playing a leading role in negotiating oil output cuts among its members, while an agreement was also reached with non-OPECX oil-producing countries in this regard.
Commenting on this, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu,said, "By the time that we resume in 2015, one of the things that I inherited was to assume on behalf of His Excellency, the president, the Presidency of OPEC and we were taking over OPEC at a time when prices were plummeting to the late $20 per barrel ranges; country were fighting attrition wars in terms against one another in terms of who is going to pump more volumes into the market.
"So it was a very tough time at which Nigeria assumed OPEC Presidency. So my first job was to bring everybody together; find a way of stopping the attrition war and see how we could bring everybody together to find a common going forward policy that will help OPEC regain its credibility and oil regain its relevance at premium pricing.
"With lots of meetings in various parts of the world eventually came the OPEC declaration of the need to move out 1.8 million barrels out of the oversupplied market and then thereafter, more engagements with non-OPEC producers led by Russia. Nigeria played a very key role in this; in all the negotiation stages, in leadership of sub-committees and in crafting the final agreement that we signed."
In addition to the output cut, Nigeria was able to negotiate an exemption for itself and also secured extensions on two different occasions , by providing a substantial justification to ensure its production remained where it would be and also continue to produce to be able to fulfill and cover some of the gaps and some of the difficulties it faced in previous years of militancy.
This helped stabilized supply from Nigeria, stabilized the country's income, and also ensured that the country's our budget was able to get largely funded. It also brought a significant growth in the country's foreign exchange reserves, ensuring that for the first time the reserves grew dramatically from $25 billion to as high as $45 billion currently; a $20 billion movements in terms of reserve growth.
In addition, not satisfied with its current role, Nigeria vied for the position of the Secretary-General OPEC and successfully gotten other member countries to vote in its candidate, Mr. Mohammed Barkindo.
Nigeria also played a key role in reviving the African Petroleum Producers' Organization, APPO, serving as its president in 2015, relinquishing the position in 2016, and picking up the position again in 2018, when member nations unanimously agreed to select Nigeria to lead the reforms programmes of the group.
Grant Nnamdi Kanu, other Biafra agitators Presidential pardon, Ohanaeze Youths urge Buhari
Kachikwu said the reappointment of Nigeria to the presidency of APPO, was to focus the organisation on benefits for its members, and most substantially, be able to create an integral dynamism in terms of investment within the African region and be able to protect the market that we have.
In its pursuit of international coordination, the country also reawakened its activism in Gas Exporting Countries Forum, GECF, where after setting up proper representation to the technical and economic council, began to align some of the gas policies with international best standard , while also attracting solid investment into the gas sector.
"One of the fallouts of this is the decision of the Nigerian LNG Limited now to take its 7th train and therefore, increase substantially, the gas production in Nigeria; move Nigeria to about the second or third largest gas exporter in the world. That is a substantial move and it is a huge amount of investment and huge amount of investors' confidence in this country," Kachikwu noted.
Oil thieves, pipeline vandals to get life imprisonment —NSCDC
Kachikwu, on behalf of the country, also undertook strategic visits to the headquarters of international oil companies, IOC, where the commitment of these companies to invest in Nigeria was secured.
Police foil armed robbery incident in Abuja Community January 29, 2023
10,000 PDP, NNPP members in Kano dump Atiku, Kwankwaso, join Tinubu in APC January 29, 2023
We will protect your mandate, Adeleke tells protesters January 29, 2023
Ondo Amotekun arrests 80 suspected criminals in 3 weeks January 29, 2023