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23 April 2020

Oil crash may warrant production halt, says NNPC

Nigeria has not stopped producing crude oil but a persistent crash in oil prices may lead to a halt in production, the Nigerian National Petroleum Corporation has declared.

On Tuesday, global oil price benchmark, amid the demand collapse caused by reduced economic activities, Brent, against which Nigeria’s crude oil is priced, fell by $6.34 to $19.23 per barrel.

Nigeria recently slashed the oil price benchmark for its budget to $30 per barrel from $57 per barrel, but oil prices kept crashing since the outbreak of coronavirus as demand plunged.

On whether Nigeria had stopped oil production due to the persistent price crash, the country’s national oil firm said it had not.

It was, however, quick to explain that this might happen should global crude oil prices maintain persistent downward plunge.

The Group General Manager, Group Public Affairs Department, NNPC, Kennie Obateru, told our correspondent on Wednesday that oil production had not stopped.

He said, “If the situation persists, it is something that is bound to happen definitely.

“We can’t keep producing if there is no market to sell to. And it is not something that is peculiar to Nigeria. It is a global thing.”

He added, “However, it has not happened. For as much as I know and up till this morning, nothing of such has happened.”

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