Oil Prices: FG to Suspend Investment In Reserves, Production

Apparently worried by falling crude oil prices in the global market The Federal Government has concluded plans to put on hold all fresh investments in the upstream sub-sector of the Nigerian oil and gas industry Oil price has continued to fall since mid 2008 from an all time high of  $147 per barrel to $35 per barrel in January According to Nigeria’s minister of petroleum resources, Dr Rilwan Lukman, the country will not embark on new investments pending when there will be improvement in crude oil prices.Rilwan spoke in Vienna Austria last week that “Nigeria will also not invest as a producing country under the prevailing situation.
We will not invest. Why should we invest heavily when we have the capacity to produce 3 million barrels per day (mbpd) and having shut-in of about 1mbpd? Why should we invest in more capacity and more reserves that we cannot produce?  It does not make sense”. according to him, the only price that can encourage new investment in the industry is $140 per barrel adding that: “if anybody will ask me of the appropriate  price of crude oil that will encourage investment I think that $140 per barrel is good to encourage investment”, he said.
 “What we are trying to do now through our intervention with the Organisation of Petroleum Exporting Countries is to try and help move the prices of crude oil up.  It is unfortunate that we are producing crude oil and selling it in the international market that we cannot dictate the price to buyers”, he stressed.