Oil Price War:Nigeria Sleeps

A few days ago, the head of the Nigeria National Corporation, NNPC, Mr Kachikwu said Nigeria will not participate in the struggle for buyers.  "We will target Asian countries with refinery contracts"

We said he was fatally wrong.

On Monday, China officially announced that its economy has performed too badly. The lowest in six years.

China is giving foreign investors access to Shenzhen's stock Market. A move to make it easier to involve technology companies via an exchange with Hong Kong.
It has too much oil suitors .What it wants is to shift from core export of products to services and high tech.

By the way, even the cheap oil China and India are buying is for stockpile.

Mr Kachikwu did not know the following before telling the press the missteps Nigeria will take.

A) The middle East: in the past, OPEC moves as a club. But not anymore.
 Iraq, for example, is cutting prices by $3.60, Kuwait by $1.9 and Qatar by $2 . Iran practically lets India and China take as much as they want in exchange for restarting the Iranian economy should sanctions be lifted.

Saudi Arabia is offering to pay for the cost of shipping to your door steps.
South Sudan gives Israel almost free in exchange for defending them against the North.

B) Security: Buyers are fearful of Nigeria Waters because of pirates and militants.

C) Distance: The countries Mr Kachikwu aims to target with his quack remedies are in Asia. Most big producers are in Asia. Brunei, for instance, takes care of Singapore and its neighbours.

D) Policy: Even as the Oil prices war rages, Nigeria has no Oil minister and thus in the eyes of global players in the industry, the country is a No Go.

E) Perhaps Nigeria wants its oil to be bought in Naira, there are really no buyers for its crude because of its foreign exchange policy.

Mr Kachikwu knows that what Mr Buhari is spending comes from a dwindling foreign reserve. Nigeria earns nothing at the moment.
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What the whole thing means for Nigeria is that there is no more international bench marks for oil prices. It cost Saudi Arabia $6 to get a barrel of oil. It will easily beat Iraq by knocking off $10 off the prices.

The oil price cuts by the Countries of the Middle East are a not so much a sign of desperation, which it is, but also "about building relationships".
According to Kareesh karmar, a Singapore based analyst," it is an all out war. Alliances have crumbled. These countries need money"

When the foreign reserve runs out, and all buyers already have clients, Nigeria will be an economic wilderness. It will have men like Kachikwu to thank.

Nigeria's lack of strategy about the oil war is very unwise.It will pay costly prices for it.
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