Even At $11, No One Is Buying Our Oil, Restructuring Has Started, By Patrick Okigbo III

Related stories

No Untouchables, I’ll ‘Touch’ Abuja Wealthy And Heavens Won’t Fall — Wike Boasts

By Kolawole Ojebisi The Minister of the Federal Capital Territory,...

Tears As Nigeria’s Ex-Ambassador To US, Jubril Aminu, Dies At 85

By Kolawole Ojebisi A renowned Nigerian scholar, politician and diplomat,...

“Why Wike’s Politics Should Be Studied At Universities,” Says Ooni of Ife

By Abiola Olawale The Ooni of Ife, Oba Adeyeye Enitan...

Using FOI Act As Blackmail tool Not Activism But Sabotage — NEITI Warns

By Kolawole Ojebisi The Nigeria Extractive Industries Transparency Initiative (NEITI),...

Oil Prices Rise Despite OPEC+ Output Hike Plans

Morgan Stanley forecasts that OPEC+ will restore all 2.2...

#COVID19Thoughts: TSUNAMI LOADING …

If you are a state governor in Nigeria and you are not already working round the clock, night and day, you are playing with fire. Red-hot, napalm FIRE! Here is your reality. Bonny Light (Nigeria’s crude oil) is trading at about $11. This is half the cost of producing the barrel. Even at that price, Nigeria is not able to sell her crude oil. She has tens of millions of barrels of crude oil in scores of vessels cruising the seas, like a gala seller in Lagos traffic, looking for customers.

No is calling; no one is buying. Nigeria is offering a $5 discount per barrel but who will buy when U.S. shale oil is selling for $2 (and no one is buying that either). Nigeria has other bigger challenges because it does not have onshore crude oil storage so she has to put her oil on vessels. In the last week, the cost of renting the vessels doubled to $350,000 per day. Do you see the picture?

Clearly, this has to be the lowest the oil price can fall, right? Wrong! Over the weekend, Canadian oil hit -$3. Not $0; minus $3. They, too, are not selling. Why? China – the factory of the world – is running at a fraction of its capacity. The airlines are shutdown. Farms and factories are shut down. Many analysts are saying that the world may not get back on its feet for a few more months. In reality, we may be stuck in this new world until a vaccine is found for the novel Coronavirus and a major percentage of the global population vaccinated. Unknot your tie, we may be in this new world for a while.

Mr. State Governor, why should you care? The world as you know it has changed and nothing has prepared you for what you and the residents in your state are about to experience. All state governments except Lagos depend on allocations from the sale of Nigeria’s crude oil for most of their revenue. The Federal Government allocations to the states started dropping off a few months ago. It will get worse.

About a month ago, I had a chat with one of the State Commissioners for Budget and Economic Planning. At that time, he was already petrified by what he was seeing. The cheque from the federal government was getting lighter. Sadly, he couldn’t get his principal and colleagues to understand that what they saw moving in the distance were not clouds but a Tsunami that is gathering speed. Many of the state governors still can’t see it.

Mr. State Governor, the catastrophe is close at hand but you still have some time to lay the sandbags. This is the time to get into emergency mode and plan for the worst. What will you do when it becomes obvious to you, in a few weeks, that you can’t pay salaries and provide the basic minimum public services required in your state? What are the economic choices you have to make today? What things do you have to cut off today to be able to tide over tomorrow?

What will you do when hordes of criminals take to the street, looting and killing people, in search of something to eat? What if there are multiple demonstration by different groups of people in different parts of your state? What are your options? Who are the people who would help you maintain public order? I am sure you are not banking on the Nigerian Police Force. They won’t have enough bullets to kill the number of people who would be on the streets. It can’t be the vigilante groups. They may be the ones doing the looting and killing. Basically, how are you going to balance this elephant on the top of a needle?

Set up your “war-room” now. Pull in your best thinkers. Borrow from other states and outside Nigeria if you must. Reach out to everyone who has a voice in your state. Your best solution may be to convince the people instead of through coercion. Decide who is in the best position to convince the different groups of people. This is no time to be partisan. Turn this problem into a shared one. Don’t let anyone brand it your problem.

Plug the leakages in your system starting with the “security votes”. Call on the illustrious sons and daughters of the state and convince them to join you in planning for and in funding palliatives for the poor and vulnerable.This is the time to plan and act. Act as if you are convinced that the dam will break. It is more than likely that it would. If it doesn’t, you are still ahead. If it does, you will be ready. Don’t be caught napping. It won’t be pretty.

  • Patrick Okigbo 111 is principal partner, Nextier Capital Ltd, Abuja
Hamilton Nwosa
Hamilton Nwosa
Hamilton Nwosa is an experienced, and committed communication, business, administrative, data and research specialist . His deep knowledge of the intersection between communication, business, data, and journalism are quite profound. His passion for professional excellence remains the guiding principle of his work, and in the course of his career spanning sectors such as administration, tourism, business management, communication and journalism, Hamilton has won key awards. He is a delightful writer, researcher and data analyst. He loves team-work, problem-solving, organizational management, communication strategy, and enjoys travelling. He can be reached at: hamilton_68@yahoo.com

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

[tds_leads input_placeholder="Your email address" btn_horiz_align="content-horiz-center" pp_msg="SSd2ZSUyMHJlYWQlMjBhbmQlMjBhY2NlcHQlMjB0aGUlMjAlM0NhJTIwaHJlZiUzRCUyMiUyMyUyMiUzRVByaXZhY3klMjBQb2xpY3klM0MlMkZhJTNFLg==" pp_checkbox="yes" tdc_css="eyJhbGwiOnsibWFyZ2luLXRvcCI6IjMwIiwibWFyZ2luLWJvdHRvbSI6IjQwIiwiZGlzcGxheSI6IiJ9LCJwb3J0cmFpdCI6eyJtYXJnaW4tdG9wIjoiMTUiLCJtYXJnaW4tYm90dG9tIjoiMjUiLCJkaXNwbGF5IjoiIn0sInBvcnRyYWl0X21heF93aWR0aCI6MTAxOCwicG9ydHJhaXRfbWluX3dpZHRoIjo3NjgsImxhbmRzY2FwZSI6eyJtYXJnaW4tdG9wIjoiMjAiLCJtYXJnaW4tYm90dG9tIjoiMzAiLCJkaXNwbGF5IjoiIn0sImxhbmRzY2FwZV9tYXhfd2lkdGgiOjExNDAsImxhbmRzY2FwZV9taW5fd2lkdGgiOjEwMTksInBob25lIjp7Im1hcmdpbi10b3AiOiIyMCIsImRpc3BsYXkiOiIifSwicGhvbmVfbWF4X3dpZHRoIjo3Njd9" display="column" gap="eyJhbGwiOiIyMCIsInBvcnRyYWl0IjoiMTAiLCJsYW5kc2NhcGUiOiIxNSJ9" f_msg_font_family="downtown-sans-serif-font_global" f_input_font_family="downtown-sans-serif-font_global" f_btn_font_family="downtown-sans-serif-font_global" f_pp_font_family="downtown-serif-font_global" f_pp_font_size="eyJhbGwiOiIxNSIsInBvcnRyYWl0IjoiMTEifQ==" f_btn_font_weight="700" f_btn_font_size="eyJhbGwiOiIxMyIsInBvcnRyYWl0IjoiMTEifQ==" f_btn_font_transform="uppercase" btn_text="Unlock All" btn_bg="#000000" btn_padd="eyJhbGwiOiIxOCIsImxhbmRzY2FwZSI6IjE0IiwicG9ydHJhaXQiOiIxNCJ9" input_padd="eyJhbGwiOiIxNSIsImxhbmRzY2FwZSI6IjEyIiwicG9ydHJhaXQiOiIxMCJ9" pp_check_color_a="#000000" f_pp_font_weight="600" pp_check_square="#000000" msg_composer="" pp_check_color="rgba(0,0,0,0.56)" msg_succ_radius="0" msg_err_radius="0" input_border="1" f_unsub_font_family="downtown-sans-serif-font_global" f_msg_font_size="eyJhbGwiOiIxMyIsInBvcnRyYWl0IjoiMTIifQ==" f_input_font_size="eyJhbGwiOiIxNCIsInBvcnRyYWl0IjoiMTIifQ==" f_input_font_weight="500" f_msg_font_weight="500" f_unsub_font_weight="500"]

Latest stories

NDN
Latest News
No Untouchables, I'll 'Touch' Abuja Wealthy And Heavens Won't Fall -- Wike BoastsTears As Nigeria's Ex-Ambassador To US, Jubril Aminu, Dies At 85"Why Wike's Politics Should Be Studied At Universities," Says Ooni of IfeUsing FOI Act As Blackmail tool Not Activism But Sabotage -- NEITI WarnsOil Prices Rise Despite OPEC+ Output Hike PlansTop 10 wealthiest cities in the world in 2025Ruto Teases Kenyan Men: Nigerians Marrying Our Women...'Balance This Scale' To Avoid Brain DrainTrump, Biden Clash Over Probe Into Alleged Cover-Up of Health CrisisAkpoti-Uduaghan Distances Self From Viral Video on TinubuRanked: Countries With the Highest Remittance CostsUS Green card, legal status, buying land, own properties, permanent resident statusLagos: Mr Governor, this sacrifice must get to OlodumareDrama As APC, PDP Trade Words Over Davido, Gov Adeleke's Visit To TinubuEFCC Declares Two More Wanted Over CBEX FraudDefection: Maku Backs Alia, Says No Plan To Make Benue Gov. Dumps APC For PDP
X whatsapp