Preparing For A Future Without Oil By Kingsley Omoyeni

As the prices of crude oil continue to drop, coupled with glut of oil in the global oil market, the attention of most countries who had in the past depended on oil as their major income are gradually drifting towards agriculture as the only panacea to their sudden economic downturn.

Nigeria, being a major oil producing and exporting nation in the world had also hitherto depended on oil as the largest chunk of its foreign exchange thereby neglecting the agric sector for many years.

During those years of neglect, a lot of rural roads that lead to farmlands which were supposed to be the undisturbing major source of income for the country had been neglected, hence leaving a lot of those roads in a very bad state and leaving a lot of the rural areas where there are large farmlands inaccessible.

The nation is going through recession and it has become very obvious that the only way out of such economic quagmire is for all and sundry to go back to our root and embrace farming in a subsistence, massive and commercial proportion.

If anyone wants to go into farming in any of these proportion, then the only way to go is to settle in the rural areas where one can find large expanse of land to farm in large quantities.

For a nation or state to get into farming in large proportion, rural farmers need to be encouraged in a lot of ways and one of such ways is by making their farms motorable and accessible so as to easily transport their farm produce to various markets around them.

Aregbesola and the Osun Rural Access and Mobility Project, Osun RAMP can then be described as a match from heaven downturn going by the huge impact the activities of Osun RAMP has had on rural communities through the construction and rehabilitation of roads.

The state of Osun being an agrarian state is made up of many rural areas with vast farmland which needs accessible roads to allow the farmers in such communities to transport their farm produce to nearby markets for sale.

It was therefore a huge respite to the government and the people of Osun through the efforts of Ogbeni Rauf Aregbesola when the state was chosen as one of the lucky states to benefit from the RAMP intervention through the World Bank and the French Development Agency in the construction and rehabilitation of rural roads across the state so as to assist farmers in the transportation of their goods to the cities and in return boost the economy of the state through farming.

The project in Osun is being implemented and supervised by the State Project Implementation Unit (SPIU), a body made up of heads of state government agencies and parastatals; chief among them is the Ministry of works and the Ministry of Agriculture and Food Security, and through its activities, the project has had a wider impact on the affected communities by providing accessibility which has brought livelihoods to the poor and at the same time boosted the economy of the state.

The Aregbesola administration and Osun RAMP met a lot of the rural roads in a state of disrepair, but the story of many of these roads have changed significantly today, as lot of the roads are now wearing new looks and farmers and traders alike are now experiencing boom in their marketing activities.

Commercial activities in many of the said communities have now doubled because their markets are now flooded with varieties of farm produce on every market day.

A lot of communities which had formerly been cut off by rivers from major markets now have access to the markets because Osun RAMP have succeeded in constructing bridges that will stand the test of time for them.

Some of the communities in Osun where river crossings or bridges were constructed include: Elewonta in Iwo, Olomu stream in Irewole local government, Iree Polytechnic road in Boripe, Olukesi farm – Oju eri in Boluwaduro local government, Ipon Stream in Odo-Otin, Odo Owere in Ede North local government, Gbalefe road, Modakeke in Ife east, as well as Oke-Aho stream located at Sekona in Ife North local government.

Others are: Faweri river in Ife South local government, Ogbaagba Ogudu, Odo Oroki in Obokun local government, Opa bridge in Odunrin via Ipetumodu, Oyile River in Ilasetown, Oyi Adunni in Oke-Ila among others.

The impact of the RAMP intervention on rural roads in Osun cannot be overemphasised as most of the rural dwellers are now happier going by the fact that they are able to do what they know how to do best with ease.

Gone are the days when they have to trek long distances of bad roads before they get to their farms, as transporting their produce to the market is now much easier and the various rural markets are now much more busy than it used to be simply because a lot of farmers can now bring their goods to the market.

Traders on some rural market days across the state have testified to the fact that they now make brisk business as a result of the accessibility to their various markets, saying that they now get a lot of patronage from people living in urban centres.

Food and beverage vendors in the communities now make more money as more people now visit the rural areas as a result of good roads; urban dwellers are now able to take their cars to rural communities without the fear that bad roads may cause a breakdown of their cars.

Lumbering activities in most of the rural communities have also increased tremendously because their Lorries no longer get stucked in mud during rainy season.

New private schools as well as petrol filling stations are now springing up on a daily basis in most of the rural communities; this is because the roads are now motorable and the volume of cars plying the roads are now more than it used to be. Good roads as they say, truly aid rapid development of an area.

Some of the roads rehabilitated and constructed by the Osun RAMP include: 13.7km Agbowu-Aba onile roads, 13.73km Ogbaagba-Eleru-Bode Osi roads, 3.1km Asa-Dagbolu-Ajagunlase road, the 12.73km Ikonifin-Sade-Ajagunlase road, 11.1km Agoro-Ikonifin road, the 4.38km Pataara-Ileko Oba farm settlement road and the 4.38km Akinyele-Aba ayo-Isero road.

Others are: 3.91km Eeleke-Kanko road, 10.5km Jagun Osi/Onikoko-Osi-Sooko Road, 9.3km Ara Joshua-Yinmi Oja road, 10.9km Gbengbeleku junction-Owode Amu road, 39.164km Shasha road, the 3km Ilesa-Ilo Olomo boundary, 8.8km Ilesa-Odogbo-Igbowiwi road, 6.58km Odogbo-Iwara road.

Also touched by the intervention are roads such as the 1km Isale general township road in Ilesa, the 10.5km Isale General Hospital-Muroko-Okebode road, 10.7km Ira-Ikeji ile-Oligeri-Iragbiji road, Ira-Ibete road, Ikeji Arakeji-Aikulola road, the 10.8km Idiroko/Akinyele farm settlement, the 18.7km Mokore farm settlement road, 30km Orile Owu-Ago Owu-Ogedengbe road, 20km Alaguntan forest reserve road among others.

And just recently, precisely in November, the government of Osun took its drive to opening Osun to the world through road infrastructures which flagged off with the construction of another 1 kilometre access road to Olumirin Water Falls being sponsored by the Government of the State of Osun with the implementation to be carried out by Osun Rural Access and Mobility Project.

The solution to the current economic downturn in the nation is the opening of rural roads that lead to farm settlements and Osun RAMP is doing just that in the state of Osun.

The World’s Most Valuable Resource Is No Longer Oil, But Data

A new commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow. A century ago, the resource in question was oil. Now similar concerns are being raised by the giants that deal in data, the oil of the digital era. These titans—Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft—look unstoppable. They are the five most valuable listed firms in the world. Their profits are surging: they collectively racked up over $25bn in net profit in the first quarter of 2017. Amazon captures half of all dollars spent online in America. Google and Facebook accounted for almost all the revenue growth in digital advertising in America last year.

Such dominance has prompted calls for the tech giants to be broken up, as Standard Oil was in the early 20th century. This newspaper has argued against such drastic action in the past. Size alone is not a crime. The giants’ success has benefited consumers. Few want to live without Google’s search engine, Amazon’s one-day delivery or Facebook’s newsfeed. Nor do these firms raise the alarm when standard antitrust tests are applied. Far from gouging consumers, many of their services are free (users pay, in effect, by handing over yet more data). Take account of offline rivals, and their market shares look less worrying. And the emergence of upstarts like Snapchat suggests that new entrants can still make waves.

But there is cause for concern. Internet companies’ control of data gives them enormous power. Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the “data economy” (see Briefing). A new approach is needed.

Quantity has a quality all its own

What has changed? Smartphones and the internet have made data abundant, ubiquitous and far more valuable. Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace—more raw material for the data distilleries. As devices from watches to cars connect to the internet, the volume is increasing: some estimate that a self-driving car will generate 100 gigabytes per second. Meanwhile, artificial-intelligence (AI) techniques such as machine learning extract more value from data. Algorithms can predict when a customer is ready to buy, a jet-engine needs servicing or a person is at risk of a disease. Industrial giants such as GE and Siemens now sell themselves as data firms.

This abundance of data changes the nature of competition. Technology giants have always benefited from network effects: the more users Facebook signs up, the more attractive signing up becomes for others. With data there are extra network effects. By collecting more data, a firm has more scope to improve its products, which attracts more users, generating even more data, and so on. The more data Tesla gathers from its self-driving cars, the better it can make them at driving themselves—part of the reason the firm, which sold only 25,000 cars in the first quarter, is now worth more than GM, which sold 2.3m. Vast pools of data can thus act as protective moats.

Access to data also protects companies from rivals in another way. The case for being sanguine about competition in the tech industry rests on the potential for incumbents to be blindsided by a startup in a garage or an unexpected technological shift. But both are less likely in the data age. The giants’ surveillance systems span the entire economy: Google can see what people search for, Facebook what they share, Amazon what they buy. They own app stores and operating systems, and rent out computing power to startups. They have a “God’s eye view” of activities in their own markets and beyond. They can see when a new product or service gains traction, allowing them to copy it or simply buy the upstart before it becomes too great a threat. Many think Facebook’s $22bn purchase in 2014 of WhatsApp, a messaging app with fewer than 60 employees, falls into this category of “shoot-out acquisitions” that eliminate potential rivals. By providing barriers to entry and early-warning systems, data can stifle competition.

Who ya gonna call, trustbusters?

The nature of data makes the antitrust remedies of the past less useful. Breaking up a firm like Google into five Googlets would not stop network effects from reasserting themselves: in time, one of them would become dominant again. A radical rethink is required—and as the outlines of a new approach start to become apparent, two ideas stand out.

The first is that antitrust authorities need to move from the industrial era into the 21st century. When considering a merger, for example, they have traditionally used size to determine when to intervene. They now need to take into account the extent of firms’ data assets when assessing the impact of deals. The purchase price could also be a signal that an incumbent is buying a nascent threat. On these measures, Facebook’s willingness to pay so much for WhatsApp, which had no revenue to speak of, would have raised red flags. Trustbusters must also become more data-savvy in their analysis of market dynamics, for example by using simulations to hunt for algorithms colluding over prices or to determine how best to promote competition (see Free exchange).

The second principle is to loosen the grip that providers of online services have over data and give more control to those who supply them. More transparency would help: companies could be forced to reveal to consumers what information they hold and how much money they make from it. Governments could encourage the emergence of new services by opening up more of their own data vaults or managing crucial parts of the data economy as public infrastructure, as India does with its digital-identity system, Aadhaar. They could also mandate the sharing of certain kinds of data, with users’ consent—an approach Europe is taking in financial services by requiring banks to make customers’ data accessible to third parties.

Rebooting antitrust for the information age will not be easy. It will entail new risks: more data sharing, for instance, could threaten privacy. But if governments don’t want a data economy dominated by a few giants, they will need to act soon.

Source: The Economist

Oil Heads for Third Weekly Loss as U.S., Nigeria Prolong Glut

Oil headed for a third weekly drop as rising supplies from the U.S. and Nigeria showed that OPEC is still struggling to clear a global oil surplus.

Futures were little changed in New York Friday, returning to the sub-$50 levels traded when OPEC first agreed to output curbs in November. U.S data released Wednesday showed total crude and product stockpiles rose by the most since 2008 last week, surprising a market that had been expecting further declines. American output is also seen surging in 2018 to a record above 10 million barrels a day. In Nigeria, Royal Dutch Shell Plc lifted restrictions on exports of a key grade halted for more than a year.

Oil has largely given up its gains after the Organization of Petroleum Exporting Countries and its allies including Russia agreed late last year to curb output. A persistent glut amid a ramp-up in U.S. production this year has kept prices under pressure. Even this week, the oversupply has kept oil in check amid turmoil in the Middle East, the world’s largest producing region, as a Saudi Arabia-Qatar diplomatic feud flared and suicide bombers struck Iran’s capital Tehran.

“We’ve gone down pretty much since the OPEC extension. That was kind of the game-changer,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said by telephone. “This has been the most vicious battle between the bulls and the bears. Obviously, the inventory draws haven’t happened as quickly” as the bulls would like.


Oil Prices Extend Gains

Oil prices gained further Tuesday, boosting energy companies’ shares, after Russia and Saudi Arabia indicated they could extend an output cut into next year, while the euro struck a six-month dollar high.

The world’s top two crude-producing nations raised the idea at the weekend, with a deal agreed between OPEC — of which Saudi Arabia is the key player — and Russia coming to an end in six weeks.

The news sent oil prices soaring about two percent on Monday, and a further 0.5 percent on Tuesday, helping energy groups strengthen global stock markets.

Share price gains for Royal Dutch Shell and BP on Tuesday helped push London’s benchmark FTSE 100 to a new record high of 7,505.46 points.

“Another day, another record high for the FTSE 100,” said Kathleen Brooks from City Index.

Volatility was at “extremely low levels and the oil price (continued) to benefit from the OPEC-effect,” she said.

Vodafone was the top performer, gaining 4.2 percent, despite registering a 6.1-billion-euros ($6.9-billion) annual loss, as traders focused on the increased dividend and optimistic outlook for next year.

But eurozone equity markets — less exposed to commodity-driven stocks — fell back, with Frankfurt down 0.1 percent and Paris down 0.3 percent, despite confirmation that the single currency area’s economic growth in the first quarter was a solid 0.5 percent.

Gains in the oil markets come after the commodity was battered earlier this month on worries that the production cut was not enough to make a dent in a worldwide supply glut.

On Tuesday the International Energy Agency said supply and demand in the oil market are close to matching up but warned rising US supply could mitigate the OPEC-led production cuts.

– Euro hits heights –

In Asia, Tokyo’s main shares index edged up 0.3 percent by the close, Hong Kong slipped 0.1 percent on profit-taking following a six-day rally, while Shanghai finished up 0.7 percent, marking a fourth straight day of gains.

On currency markets, the euro extended gains to break above $1.10 — reaching a six-month high — as the dollar wobbled following a series of below-par results out of the US, including on inflation.

“The euro is strengthening as political concerns in Europe ease, while the dollar is being sold” after the weak economic data, Marito Ueda, a senior dealer at FX Prime, told AFP.

The European single currency hit $1.1059 on Tuesday — the highest point since November 9.

Elsewhere Tuesday, official figures showed that British inflation had risen to 2.7 percent — its highest level since September 2013 — but failed to boost the pound as investors bet against an immediate rise in interest rates to curb prices.

“With little sign of overheating in the domestic economy, and only one (Bank of England) Monetary Policy Committee member voting for higher rates at last week’s policy meeting, it seems rates will be stuck at 0.25 percent for some time,” said Ben Brettell from Hargreaves Lansdown.


OPEC Wants ‘Collective Efforts’ to Counter US Oil Output

OPEC said Thursday that oil producers needed to make more joint efforts to match supply and demand in the oil market in the face of rising output in the United States.

Ahead of a May 25 meeting of the cartel where its members and Russia are expected to roll over an agreement to cut production, OPEC said in its monthly market report that common policies were needed for market stability.

While decreased stocks and an improving global economy were supporting oil demand, “continued rebalancing in the oil market by year-end will require the collective efforts of all oil producers to increase market stability,” OPEC said.

Global oil prices recently dipped briefly under $50 dollars per barrel for the first time since OPEC and Russia scaled back output as concerns whether the deal would be renewed and the impact of rising output in the United States weighed on the market.
OPEC members agreed in November to cut production by 1.2 million barrels per day for six months beginning from the start of the year in a bid to reduce the glut of oil supplies on the shore up prices.

Non-cartel producers led by Russia partially matched the cuts.

Oil prices have recovered somewhat this week as OPEC and Russian officials have signaled a renewal of the production deal is likely.

But the OPEC report confirmed the cartel’s concern about a recovery in US oil output.

The cartel abandoned its traditional strategy of limiting supply to support prices between 2014 and 2016, stepping up production and causing a plunge in prices to under $30 per barrel as they sought to squeeze out higher cost US shale producers.

While US output fell last year, OPEC sees it recovering and expanding further in 2017.

Overall, the cartel expects non-OPEC supply to increase by 0.95 million barrels per day, with the United States alone likely to contribute 0.82 million barrels per day.


FG, States Get More Money as oil Sabotage Continues

The Federation Account Allocation Committee (FAAC) on Tuesday shared N467.8 billion, N38.7 billion more than what the three tiers of government shared in March. The cheering news also came with a sobering report: oil pipeline sabotage continued during the period and it affected the proceeds from export.

The Accountant-General, Mr Ahmed Idris, who represented the Minister of Finance, Mrs Kemi Adeosun, told journalists in Abuja that the N467.8 billion was distributed under four sub-heads.

“The distributable revenue for the month is N299.93 billion. The sum of N6.33 billion was refunded by NNPC.

“There is also a proposed distribution of N66.96 billion from the excess Petroleum Profit Tax.

“Also, exchange gains of N22.25 billion is proposed for distribution, therefore the total revenue distributable for the current month, including VAT of N78.65 billion is N467.8 billion,” she said.

Adeosun also said that the government generated N228.54 billion as mineral revenue, an increase of N16.94 billion from what was generated in February.

Similarly in March, the non-mineral revenue also increased by N24.47 billion, from the N78 billion the country generated in February.

The minister said after deducting cost of collections to the revenue generating agencies, the Federal Government got N136.5 billion, states N69.23 billion and local government councils N73.26 billion.

In addition, she said the sum of N18 billion was given to the oil producing states based on the 13 per cent derivation principle.

On the balance of the excess crude account, the minister said the account currently stood at 2.45 billion dollars.

Despite the increase in revenue generated for the month, the Federal Government drew attention to the decrease in crude oil export volume.

She said that crude oil export sales dropped by 6.4 million dollars.

She also said that the oil revenue for the month also suffered from continued leakages of oil pipelines arising from sabotage of oil pipelines.

The Chairman of Forum of Finance Commissioners in Nigeria, Mr Mahmoud Yunusa, spoke on the increase in the allocation and what it meant to states.

“Oil prices is looking very promising and the Federal Government will do everything to ensure continued peace in the Niger-Delta,” he said.


N720 Billion Revenue Under Threat as 51 Oil Licences Expire

About 51 Oil Prospecting Licences (OPL) and Oil Mining Lease (OML) of different oil blocks have expired between 2010 and March 2017 and this is therefore threatening about $2 billion (N720 billion) in signature bonuses. Another 85 OPL and OML will expire between April 2017 and 2029, according to upstream concession status obtained from the Department of Petroleum Resources (DPR).

Experts believe that the failure to renew the licences is robbing the country of several billions of unpaid signature bonuses.

Already, the House of Representatives has begun its investigation into leakages within the Department of Petroleum Resources (DPR) in respect of ownership, distribution and authenticity of OML, OPL, relinquishment, signature bonuses and bidding process.

About 17 Niger Delta onshore OMLs belonging to the Shell Petroleum Development Company of Nigeria Limited (SPDC) will expire in the next two years.
Shell has decided to be silent on whether they will renew the oil blocks at expiration by 2019 or relinquish interest.

An oil-mining lease is usually granted only to the holder of an oil-prospecting licence (OPL), upon meeting set regulations, and the term of the licence shall not exceed 20 years, and may be renewed in accordance with the Petroleum Act.

Specifically, the Nigeria Extractive Industries Transparency Initiative (NEITI) said in its current oil and gas report that discretionary decision-making and lack of openness drove down competition and returns to Nigeria, including over $2 billion in unpaid signature bonuses.

For example, OPL 204 located onshore Niger Delta, belonging to Africoil and Marketing, whose licence has been issued since 1993, expired since 2010 and there is no information regarding its renewal.

Also, Alfred James Nigeria Limited’s OPL 302, which was awarded in 1991, has expired since 2001. Efforts to get current update on the block, proved abortive.

Continental Oil and Gas’s OPL 2007 expired since October last year while Summit Oil International OPL 206 expired in 2014.

Amalgamated Oil Company Limited’s OPL 425, which was given licence since 1992, is expected to expire by May 23 this year.

OPL 305 and 306, which belong to Crownwell Petroleum Limited will expire in June this year.

Also, KNOC’s deep offshore OPLC 321 and 323 have already expired since March 9, 2016.

None of the owners of the affected oil blocks were willing to respond to The Guardian’s enquiries regarding the current status of their assets.

Efforts to get update from the DPR on the current status of these oil blocks, proved abortive as the agency despite several emails and text messages, which lasted for one month, remained silent.

When contacted, the Head of Public Affairs at DPR, Dorothy Bassey referred The Guardian to the Manager, Public Affairs, Paul Osu who also delegated the responsibility.

The officer complained of difficulty in getting useful information across to The Guardian in the last one month, up to the time of filing this report.

The Corporate Media Relations Manager, Precious Okolobo, also remained silent on the possibility of Shell renewing its licences in 2019.

But Shell said in its yearly report and Form 20-F 2016, released at the weekend that of the Nigeria onshore proved reserves, 164 million barrels of oil equivalent (boe) are expected to be produced before the expiry of the current licences, and 377 million boe beyond.

This means at the end of 2019, the company will either renew the expired licences or relinquish its stakes in the OMLs. The company had in the last two years engaged in divestment of assets in its onshore operations due to militancy and low oil prices.

According to NEITI in its latest report, past upstream licensing processes in Nigeria have fallen well short of best practices and failed to secure maximum value for the country’s assets.

This it said, led to public controversy, including lawsuits, indictments, sackings, cancelled or revoked awards, and legislative probes.

“Many deals fell through, and barely half of the fields auctioned between 2000 and 2007 have seen serious drilling. The stated goal of increasing indigenous participation was not well served. Most of the marginal fields awarded during the 2000s have not produced.”

NEIT said that |past licensing rounds in Nigeria were not tied to any comprehensive asset development strategy or broader economic development plans.

It said that Nigeria needs to develop a strategy for managing its natural resource base for current and future generations, and tie each licensing round to that strategy.

According to the Deputy Director, Emerald Energy Institute, University of Port Harcourt, Prof. Chijioke Nwaozuzu, expired licences have to be renewed, unless the acreage OPL is being explored prior to expiry.

The Guardian

Nigeria is Worst Off in Fitch’s 2017 Oil Break-Even

Nigeria is worst off, needing an oil price of $139 a barrel to balance its budget, Fitch said in a April 5 report on 14 major oil exporting nations in the Middle East, Africa and emerging Europe. Even after cuts in government subsidies and currency devaluations, 11 of them won’t have balanced government budgets this year, including Saudi Arabia, it said.

“Fiscal reforms and exchange rate adjustments are generally supporting improved fiscal positions compared to 2015, but have not prevented erosion of sovereign creditworthiness,” Fitch said.

Only Kuwait, Qatar and the Republic of Congo have estimated break-evens that are below Fitch’s oil price forecast for this year. Kuwait at $45 a barrel traditionally has a low break-even because of its high per-capita hydrocarbon production and more recently its “large estimated investment income” from its sovereign wealth fund, Fitch said.

Brent crude, a global benchmark, has averaged about $55 a barrel this year.

The rating agency said it “substantially” raised the fiscal break-even prices for Nigeria, Angola and Gabon from 2015 levels because of rising government spending.

Fitch’s forecast 2017 break-even oil prices, per barrel:

  • Nigeria at $139
  • Bahrain at $84
  • Angola at $82
  • Oman at $75
  • Saudi Arabia at $74
  • Russia at $72
  • Kazakhstan at $71
  • Gabon at $66
  • Azerbaijan at $66
  • Iraq at $61
  • Abu Dhabi, United Arab Emirates, at $60
  • Republic of Congo at $52
  • Qatar at $51
  • Kuwait at $45

Oil Prices Rise

Oil rose to a near one-month high on Wednesday on signs of a gradual tightening in global oil inventories and on concerns about a supply cut at a field in the United Kingdom’s North Sea that feeds into an international benchmark price.

Brent crude futures, the international benchmark for oil, were at 54.52 dollars per barrel, up 35 cents, or 0.65 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.65 per cent, at 51.35 dollars a barrel.

Both benchmarks on Wednesday hit their highest levels since March 8.

Nigeria Loses $80bn Annually To Oil Facilities Vandalism – Kachikwu

The Minister of State for Petroleum, Ibe Kachikwu, on Friday said Nigeria is losing at least $80 billion annually  to oil facilities vandalism in the Niger Delta.

Kachikwu stated this on in Yenagoa, Bayelsa, during the resumed dialogue with Niger Delta stakeholders as part of Acting President, Prof. Yemi Osinbajo’s visit to Bayelsa.

He said at least 10,000 sabotage incidents were recorded annually at oilfields across the region.

Kachikwu urged people of the area to contribute ideas toward the resolution of crises in the Niger Delta.

He said the challenges of the region could be turned into opportunities when peace was achieved and urged Niger Delta people to give peace a chance for the growth of the region.

Oil Price Falls Below $27/bbl

For the first time since 2003, the  price of Brent crude, the world’s benchmark oil yesterday sold below $28 a barrel, America’s crude grade – West Texas Intermediate (WTI) $26.62 and OPEC basket grade $23.85 a barrel on Tuesday.

Despite over 25 per cent slump in oil price so far this year with the attendant pains and fears, oil drillers and producing nations have continued to pump more oil into an oversupplied market. Oil traders are concerned that the crude oil supply glut could last longer.

The world stock markets are declining. Nigerian stock market last week lost over N455 billion as stock prices failed to rally.

The extent of challenge before the government and the citizens can be explained in the concerns over the implementation of this year’s budget. Currently the government has proposed to borrow $1.8 trillion to fund the budget based on a benchmark of $38 a barrel. Today the price has dropped below $27 a barrel creating a shortfall of over $10 a barrel in the budget benchmark.

The International Energy Agency (IEA) said in a report that the world may soon drown in oversupply. Senior market analyst at Price Futures Group, Phil Flynn said there is also “a record short position in hedge funds and we have the promise of more Iranian oil on the world market. Add it all up and it’s causing the crude-oil market to crater around the globe.”

Iran’s production is expected to ramp up fairly significantly this year. The country projects that its production will increase by 500,000 barrels per day (bpd ) in the coming weeks, along with a further 500,000 bpd in the next few months. The IEA in its monthly oil market report projected it will rise by 0.3 million bpd by the end of the current quarter, and by 0.6 million bpd by mid-year. The EIA expects it to average 3.1 bpd in 2016, an average increase of 300,000 bpd across the entire year.

A university don at the Pan Atlantic University, Dr Austin Nweze confirmed it would be a challenging year for the country. He said the price of oil will get worse before getting better, adding that the return of Iran into the mainstream will worsen the situation.

The Nation