He stated this at the headquarters of the Federal Ministry of Petroleum Resources during a visit to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja on Monday.
Crude oil prices crashed from over $100 per barrel in 2014 to as low as $23 in 2016, a development that threw many oil dependent countries into economic crisis.
Barkindo stated that the crisis in the oil sector was the worst ever in recent memory, adding that the industry globally lost about $1tn during the period of the oil price fall.
“In terms of the gravity of this cycle, crude oil prices have crashed by over 80 per cent from the fall of 2014 through January 2016. How you survived as a government and institutions under this industry remains a miracle. I’ve been to other countries and I saw how they are struggling, but you have weathered the storm,” he said.
The OPEC scribe, however, explained that the shut-in of about 1.8 million barrels of crude oil per day within a period of six months by the 13 OPEC and 11 non-OPEC members paid off considering the rise in crude oil prices.
He said, “This industry globally has lost nearly $1tn in terms of differed projects and outright cancellation of projects across the supply chain: upstream, midstream and downstream. And this is the greatest threat that is facing future security of supply. We need consistent investments to maintain current production as well as grow the reserves.
“In terms of national revenues, since all our countries are dependent on this commodity, within OPEC alone, we have lost cumulatively about $1tn. Therefore, we, together with our OPEC friends, are determined to solidify this platform to maintain a stable environment and restore confidence for investors.”
Barkindo said diversification of the national economy from crude oil should be given the highest attention, as he noted that countries like Saudi Arabia were diversifying away from the complete reliance on revenue from the sale of crude.
“All our competitors within OPEC are also focused on the issue of diversification. I’m just coming from Saudi Arabia, the largest producer depending solely on oil and gas, they’ve come out with a programme to diversify their economy within the context of the vision 2030,” he added.
Barkindo lauded the Federal Government for exiting the joint venture cash call agreement it had with international oil companies.
According to him, successive governments had tried to end the cash call regime but could not despite the financial burden that it had on Nigeria as well as the country’s inability to meet up with the demands of the agreement.
“By ending it, you are clearing an over-hang of debt that is too high, yet maintaining the level of production and also focusing on an incremental growth that will continue to sustain not only the industry, but the domestic economy,” he said.
Barkindo observed that the high turnover of group managing directors at the NNPC had also been a challenge to the smooth running of the corporation, but expressed delight that the current management was doing well.