23 Feb 2022: Nigerian petroleum minister just sat down for a live interview with Bloomberg this morning, and here are all the details you need to know. 

Commenting on the massive rally in oil and natural gas prices, he says that since the countries have not been investing in oil and gas sector for too long, this rally was bound to happen. There is a major gap, which can not be filled by renewables, as the investment or development of renewables can not happen as quickly. Apart from this, the geopolitical tensions have just made the situation a 100 times worse, which has created the “perfect storm”. He also says that Europe should move gradually with the development of renewables, as if they take out investment from fuel, and the development of renewables doesn’t happen at the same pace, it can further broaden the gap. 

He also mentioned that Nigeria has two major upcoming projects, one is where they are trying to take their gas all the way to Europe. To achieve the same they are building a Trans-Saharan pipeline, which will go all the way to Europe via Algeria. He mentioned that the deal for the pipeline has already been signed and the construction has also started at the Nigerian end where they have already built 614 Km of the AKK pipeline which will go all the way to the northern most border of Nigeria.

About the other project, although in just the nascent stage, the plan is to build a pipeline to take Nigerian gas all the way to Morocco.

Further he comments on how “unhappy” Nigeria is with the current stage of oil prices, and that they have always been comfortable with the prices range of $70-80/ barrel. Even though the rally hasn’t been caused by Nigeria and the cause is beyond anyone’s control, it has caused a lot of chaos in the nation.

In terms of changing their current plan of production, he says the geopolitical scenario could change any moment, the “chaos” in Europe could vanish tomorrow, and if Iran sign the nuclear deal, there will be more volume in the market, so for now the country plans to have a “wait and see” attitude.

He is hopeful that the prices would would drop to  $70-80/ barrel by the end of the year, which will be more sustainable for the country.

Commenting on the lag in their OPEC+ quotas, he says, a while back when they has to cut back, it was not possible to cut back mathematically, due to which to cut back for example 100,000 barrels they had to cut back 200,000 barrels, and they “over-complied”. In trying to cut down, more than expected was cut down, and now getting back into the groove has been hard, as it also required additional investments which have been hard to obtain. But the country has been working very hard to ramp production and they are confident that they will be able to meet their quotas by later this year. He also adds that in way way its good that this has happened as it made them realize that as a continent they can not be completely dependent on foreign investments, and the continent has been exploring how they can get their own African energy back. The continent is exploring how they can rally multilateral funding into a financial institution. Nigeria has been in talks with Afrexim, and other African producers to rally some funding for the oil and gas sector in Nigeria.

He also said that they found 260 cf of natural gas reserves in Nigeria while looking for oil, but the gas exploration was never really targeted. Now that gas exploration is being explored, the country targets to increase their reserves to per 600 cf , which is the upside that they have been seeing here. The country is focusing on maximizing their investment with companies already in the country like TOTAL, CHEVRON, EXXON MOBIL, ENI. The country plans to turn to them for additional investments, also considering the Petroleum Industry Act, which is a new law that has recently been passed, which makes investment opportunity more attractive now than ever.

Commenting on the OPEC meeting next week, he says “from a Nigerian perspective, it is not the time to be very bullish on productions right now, since the markets is still a little bit too soft for us to get very bullish”. They plan to deliver what they were expected to deliver which is 400,000 barrels, which was previously agreed to.