•Crude price crash delays projects, bid rounds•IMF transfers $3.4bn emergency assistance fund to CBNFollowing persistent volatility in the oil market, the federal government is considering lowering the oil price benchmark in the 2020 Budget from $57 to $20, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said yesterday.
The web conference was organised by the Ministry of Finance, Budget and National Development in collaboration with Partnership to Engage, Reform and Learn and the UK Department for International Development . The federal government has also decided not to hold bidding rounds for major oilfields until crude prices recover while some upstream projects will be completed much later than originally planned as a result of the crash in the price of crude oil.
“We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel,” Ahmed said at the web conference. “Where you require foreign investment…this is not a good time,” Kyari said of the licensing rounds, adding that “the appetite would be very low.” Nigeria would speed up marginal field licensing and oil mining licence renewals to try to raise revenues, Akabueze said.The finance minister said Nigeria was in talks to defer debt service obligations to “2021 and beyond.”She, however, did not provide details of the lenders with whom talks were held.
Following this development, which has raised the hope for oil demand, West Texas Intermediate crude futures were up 11.2 per cent, or $2.29, at $22.68 per barrel, while the global benchmark, Brent crude futures were up 7.2 per cent, or $1.97, at $29.17.Vehicle traffic in most of the United States, including those yet to lift shelter-in-place orders has also rebounded
Still, global oil demand and prices suffered historic losses in April and recovery is likely to be slow with air traffic not expected to rebound any time soon. The increases are, however, a modest but marked recovery from the nosedive of US crude futures for May to as much as $40 into the negative on April 20 – an unprecedented plunge below zero that traders had not previously believed was possible.While the US President Donald Trump said his administration would soon release a plan to help US oil companies, Treasury Secretary, Mr. Steven Mnuchin, said the help could include adding millions of barrels of oil to national reserves.