The Minister of State for Petroleum Resources, Ibe Kachikwu, says the world is moving away from oil, hence, it will no longer be an income resource in 10 years’ time.
Mr. Kachikwu said this in Abuja on Thursday while answering questions on “His Outlook for the Commodity in 2018.”
According to him, 2018 looks like a better year for crude in terms of pricing but countries are focusing on alternative energy.
He said, “Everything all added up together is showing us that towards the last quarter of 2018 we expect a better market. Does that better market translate to your 100 dollars price (per barrel)?
“Never! I don’t see it, frankly I don’t see it. It’s going to take a major calamity. Largely because on the back of all these, countries are racing away from oil.
“If Europe is saying in five years time, `we are going to exit oil cars to electric cars’, oil, therefore, is getting its last years.
“Except for those who produce and use it for local consumption because they’re moving slowly away from it but in terms of an income resource, you can begin to count the years in your hands.
“In 10 years’ time, I’d be very surprised if any country that hasn’t diversified enough is counting really seriously on oil.”
On outlook for price of crude by year-end, the minister said “this year, maybe 60 dollars per barrel but I don’t think it’s going to happen, so let’s say mid 50 dollars.
“If I get 55 dollars per barrel at the end of the year, I’m contented and by late 2018 60 dollars,’’ he said.
Mr. Kachikwu said private investment was the only way out of bad infrastructure and better income for government in the sector.
“Pipelines, infrastructure, whether it is gas whether it is crude; there is absolutely no way you can have this country get away from these inefficiencies we see,” he stated.
“Unless we get the private sector build pipelines, build infrastructure, tariff those infrastructure, then you’ll suddenly see the books of NNPC, government income, stability would all improve.
“More jobs would be created; you’ll have gas to power much easier.’’
According to Mr. Kachikwu, as of today, Nigeria has hit 7,000 megawatts of electricity but only has the capacity to distribute about 4,000.
“This means we have about 3,000 megawatts sitting there. What does it take? Infrastructure, so we’ve got to step out. All over the world, state by state you have about two or three power providers.
“They run their metering, charging the right tariffs for it, life goes on and they can do their investment in terms of generating the power.
“So they’re fundamental things that we need to do, especially in the oil industry but we are being very constrained.’’
He said if Nigeria had three, four or five Dangotes building refineries, the equation would change, as focus would shift from scarcity to export, thereby bringing down price.