The Federal Government has said that there is no end in sight for oil price crash as it may last longer than expected.
Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, while addressing participants at the 15th Nigeria Oil and Gas Conference in Abuja said “Crude oil prices have dropped by 60 per cent from about $110 in June 2014 to $40 by January 2015. Brent is currently trading at between $50 and $60 per barrel and there is limited visibility as to how this will evolve going forward.
“Most analysts agree that as oil producers, we should brace for extended periods of lower prices and increased price volatility. The resultant effect is that companies are slashing capital spending in 2015 as a response to this dramatic collapse in oil prices.
“According to Wood Mackenzie, relative to 2014, a total of $120bn has been cut from the 2015 upstream budgets of some 116 countries. This can go up to as much as 40 per cent.
“This means that flexibility in capital expenditure and funding in general will be further constrained in 2015.”
She added that this current trend might affect the ability to grow long term production and reach the target of four million barrels of oil per day.
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