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Looking Beyond Oil Price Collapse Towards Post Recovery Savings (Part 2)
By Austin Okere
I will attempt to share the justification for this projection from the insights expressed by experts at various fora, and my own informed postulations.
Depending on which expert you talk to, and the perceived direction of the Chinese economy, you get three different views; a school of thought holds that the price of oil may be far from the top but closer to the bottom, while others believe that oil price will bottom out at about $20 per barrel. Yet another group holds that Oil price has reached equilibrium and will oscillate between $40 and $45 per barrel.
The optimists believe that oil price will recover to between $70 and $80 per barrel towards the end of the year, and remain within that band, as a sustainable balance between demand and supply is reached.
According to the 2015 OPEC annual statistics bulletin, world crude production in 2014 was 73.4 million barrels per day (mbpd) while demand was 91.3mbpd.
With the significant scale back in shale production arising from the steep price drop from late 2014 to levels that make shale production unviable, it will be safe to assume that production has dropped considerably while demand has more or less remained steady.
The major issue for me is the question of the so called glut. If there is indeed a glut, what is the accurate size of the glut and therefore, how long will it take for supply and demand to balance out.
I listened to an expert at a recent forum argue very eloquently against the widely touted 850 million barrel excess crude inventory.
Based on the data he and his firm have meticulously collected, he believes that the excess supply cannot be more than a quarter of the touted figure.
This means that the glut is overstated by 600 million barrels. Meanwhile, Iran’s return to the market has been less dramatic than the Iranians said it will be, adding only 220,000 barrels per day (bpd) in February 2016 according to the International Energy Agency (IEA); only a fifth of their forecast of 1mbpd.
The IEA also believes that non-OPEC output will fall by 750,000 bpd in 2016, while US production alone will decline by 530,000 bpd this year.
The other possible disrupter to oil is the incentive to explore alternative forms of energy such as renewables, majorly solar and wind, in response to the impending carbon tax fuelled by fears of global warming and pollution.
According to Amy Jaffe and Jeroen van der Veer, leading experts on global energy policy, factors such as technological advancements, the falling price of batteries that power electric vehicles, and a post-COP21 (UN Climate change conference in Paris in 2015) push for cleaner energy could drive oil use below 80 million barrels a day by 2040.
These threats to oil do not seem practical on a meaningful scale in the near to medium term.
The example in Germany seems to buttress the fact that renewables may not make sense in Europe and other cold climes, and that they can only be achieved with very steep and unsustainable subsidies.
It is reported that Germany, the poster boy for renewables has so far invested about $500b on wind and solar energy. And yet renewables account for only 3.5% of global energy use, while oil and gas accounts for as much as 60% (this excludes shale, peat and coal, which account for 10%).
Electricity accounts for 18%, while biofuels and waste account for the balance 12%. In simple terms, the eight major oil companies, with a cumulative valuation of $1.4trillion generate as much as 20 million barrels per day versus the $2trillion invested so far to generate the equivalent of 7million barrels of oil per day in renewable energy. How sustainable is this huge subsidy?
For the switch to electric cars to happen, we would need to replace refineries producing petrol with power plants that will produce the additional electricity required to charge the electric cars. How quickly can this switch happen, even if it were practical?
My theory on the oil narrative is as follows: Saudi Arabia being the biggest reserve holder wanted to drive the shale producers, whom they saw as ‘squatters’ out of the market.
They opened their taps to drive prices down, knowing that shale needed an oil price of above $40 to produce at break even.
The high oil prices were driving cheap capital into shale and improving technology and yielding high returns and thus attracting more capital and repeating the cycle, thereby iteratively making shale a bigger threat.
I believe that the Saudi plan was hijacked by the Oil traders, who thrive on price arbitrage fuelled by uncertainty.
They rode on the back of increased Saudi production to shout ‘oil glut’! They increased the FUD (fear uncertainty and doubt) with news of huge inventories coming on stream following the lifting of sanctions against Iran, but the general view is that Iran’s oil was already finding its way into the market through the back door, resulting in an insignificant net increase in supply.
It then became a self-fulfilling prophesy which snowballed, with the producers pumping recklessly to maintain market share and preserve earnings, which drove prices further down, exacerbating a bad situation.
I believe that the oil traders and bankers are trying to make up for a lost bet on the back of overenthusiastic exposure to the oil market. This is captured by the screaming headline in the Financial Times of March 22, 2016 ‘$150b losses on energy company bonds spur default fears’.
The article further states that the total debt among oil and gas companies including loans almost tripled from $1.1trillion in 2006 to $3 trillion in 2014 quoting the Bank for International Settlements.
Twenty of Europe’s biggest banks have energy loans totalling $200b, enough to wipe out a quarter of their common equity, while twenty of the leading US banks have loans totalling $115b or 11% of their equity.
With the desperation arising from a risky bet gone awry, one does not need to dig too deep to glean a motivation to drive prices down, buy on the cheap and subsequently sell on the high to cover the huge debts.
I believe that in the end, the market will wave its magic wand, and supply and demand will correct themselves and reach equilibrium with price. You cannot hide a pregnancy for too long.
It is not at all surprising that the heads of the world’s largest oil trading houses, six of which sell enough oil to meet almost a fifth of global demand were unanimous in calling for an end to the two year price slump at a Financial Times conference in Lausanne.
What should be more important to all of us, beyond these theories is whether Nigeria will finally learn from her past mistakes and institute a mechanism for saving when oil prices rebound, as I believe they eventually will. And what if the optimists are wrong, and prices do not rise. We would have lost nothing.
We would have learnt to diversify away enough from oil to live comfortably within the current price. If on the other hand the optimists are right, then we will save the equivalent of $36.5b per year (i.e. 2.5mbpd X extra $40per barrel X 365 days).
In any case we would have nothing to lose by preparing and having to wait a while longer than anticipated. Success only happens when opportunity meets preparation.
Austin Okere is the Founder CWG Plc and Entrepreneur in Residence, Columbia Business School, New York. He also serves on the World Economic Forum Business Council on Innovation and Intrapreneurship.
Yola Electricity Distribution Company (YEDC) has alerted its customers to a fraudulent message circulating on social media, falsely claiming that electricity consumers can receive an additional 20 per cent bonus units when recharging their prepaid meters through unofficial channels.
In a statement issued by the company’s management on Monday, YEDC described the claim as false and urged customers to disregard the misleading information, stressing that it did not originate from the company.
According to the statement, YEDC does not offer bonus electricity units through individuals, agents, personal bank accounts, phone numbers, or social media contacts.
The company advised customers to purchase electricity tokens only through approved cashless payment platforms, including the YEDC Pay App, OPay, Interswitch, and other authorised vending channels, or to visit the nearest YEDC office for assistance.
YEDC also cautioned customers against sharing their meter details or personal information, or making payments to unauthorised persons claiming to represent the company.
The company further urged customers to rely exclusively on information disseminated through its official communication channels to avoid falling victim to fraud.
The management thanked customers for their continued cooperation and reaffirmed its commitment to serving them.
Central Bank of Nigeria (CBN) has disclosed that two foreign currency accounts opened in connection with the controversial Presidential Foreign Investment Promotion Council (PFIPC) have remained inactive since their creation, with no funds deposited and no transactions recorded.
The revelation emerged on Monday during the ongoing investigation by the House of Representatives Ad-hoc Committee probing the circumstances surrounding the establishment and operations of the council.
Lawmakers are investigating allegations that the PFIPC was created and operated without a valid legal framework and outside the established procedures required for government agencies and institutions.
Appearing before the committee, representatives of both the Central Bank of Nigeria and the Office of the Head of the Civil Service of the Federation (OHCSF) distanced their institutions from the establishment of the council.
The Office of the Head of the Civil Service of the Federation stated that it neither created the council nor possessed the constitutional authority to establish federal agencies.
Representing the office, officials explained that the OHCSF is only responsible for approving administrative structures of government agencies after all necessary requirements have been fulfilled.
According to the office, records showed that the council submitted a request on August 6, 2025, seeking approval for its organisational structure.
However, the application was not approved because the required supporting documents were not attached.
The committee heard that despite the rejection of the request, officials linked to the Presidential Economic Advisory Council (PEAC)/PFIPC later appeared during the 2025 manpower budget defence exercise and sought approval for staffing and recruitment arrangements.
The office disclosed that the council informed government officials that its activities were being carried out largely through personnel seconded or deployed from other institutions.
Lawmakers were told that the council requested approval for a total of 314 positions. The figure consisted of 14 existing officers and an additional 300 proposed positions.
The Office of the Head of the Civil Service further revealed that concerns later arose regarding documents presented by the council as evidence of its legal backing.
Officials told the committee that upon examination, the documents failed to display essential features expected of an enabling law or valid legal instrument establishing a government body.
Mrs. Didi Esther Walson-Jack, head of the Civil Service of the Federation, also rejected claims that her office deployed civil servants to work for the council.
She maintained that the office did not assign personnel to the body and did not provide office accommodation for its operations.
According to her, matters relating to the creation, supervision and oversight of government agencies fall under the responsibilities of other relevant institutions, including the Office of the Secretary to the Government of the Federation.
The Central Bank of Nigeria also provided details regarding accounts linked to the council.Nigerian current events
Hamisu Abdullahi, director at the apex bank, who represented the CBN Governor before the committee, explained that the bank opened two foreign currency accounts following a formal request from the Office of the Accountant-General of the Federation.
He told lawmakers that the request was received on July 30, 2025, and instructed the bank to create a United States dollar domiciliary account and a Pound Sterling domiciliary account.
Abdullahi stressed that the CBN only opens accounts for government agencies after receiving official authorisation from the Accountant-General’s office.
However, he disclosed that the accounts never became operational because the council failed to provide authorised signatories required for activation.
As a result, both accounts remained dormant from the day they were opened.
He informed the committee that neither account had received deposits nor processed withdrawals. The accounts also recorded no foreign exchange allocations, remittances, inflows or outflows.Governor election news
According to him, the balances in both accounts remain at zero.
The CBN official further stated that the council did not engage directly with the apex bank regarding the management or operation of the accounts after they were created.
Following the submissions, members of the committee demanded more information as part of efforts to determine the full scope of the council’s activities.
Hon. Abdulmalik Danga, chairman of the committee, directed the Central Bank to submit comprehensive records relating to both the Presidential Foreign Investment Promotion Council and the Presidential Economic Advisory Council.
The committee requested details covering the opening of the accounts, their operational history and any information connected to related banking activities.
Lawmakers also instructed the CBN to work with commercial banks to identify and provide records of any accounts linked to the entities under investigation.
However, the committee is expected to continue its hearings as more government agencies and officials appear before lawmakers to provide explanations on the controversial council and the circumstances surrounding its operations.
STEM Africa Fest, an annual science, technology, engineering and mathematics (STEM) education event designed to expose children to hands-on learning, returned to Lagos, with organisers urging greater integration of practical STEM education into Nigeria’s school curriculum to prepare young people for future careers.
The organisers said the initiative has reached over 25,000 children across Africa in six years, renewing calls for greater integration of practical STEM education into Nigeria’s school curriculum.
The festival, which began in 2021 during the COVID-19 lockdown, has expanded beyond Nigeria to Ghana, Sierra Leone, The Gambia, Zambia, Rwanda and Kenya, promoting experiential learning through science, technology, engineering, arts and mathematics (STEAM). The sixth edition which held in Lagos, attracted about 3,500 children and parents from all over.
Conveners, Titi Adewusi and Jadesola Adedeji, said the initiative was conceived to address the gap between classroom theory and practical learning, giving children opportunities to build, experiment and interact with emerging technologies.
According to Adewusi, this year’s theme, “Building Future Innovators”, reflects the organisers’ vision of nurturing Africa’s next generation of innovators, problem-solvers and creative thinkers.
“Children are learning the theories and we wanted to bring the real thing, hands-on. If you’re teaching a child about 3D printing, we want them to actually experience it. If you’re teaching a child about building robots or AI, we wanted them to experience it,” she said.
Adedeji, said the idea for the festival emerged from a shared desire to make science education more engaging after discussions between the founders several years ago.
She said the maiden edition, held during the pandemic, attracted over 1,000 participants globally, while the first physical edition recorded over 6,000 attendees.
They identified funding, stakeholder mobilisation and expanding the festival to other locations as some of the challenges encountered since its inception. They noted that increasing demand from different states and African countries had prompted them to adopt a partnership model that allows collaborators replicate the programme using an established framework.
They also urged governments at all levels to strengthen support for STEM education by integrating practical learning into school curricula and partnering with private organisations to improve access to science and technology education.
Adewusi said they have developed a STEM curriculum that is being implemented in some schools and expressed readiness to collaborate with the government to expand its adoption in line with the United Nations Sustainable Development Goal on quality education.
Adedeji added that government support should go beyond funding to include curriculum development, teacher training and institutional backing for STEM-focused initiatives.
Representing Access Holdings, Programme Manager for Sustainability, Ikechukwu Iheagwam, said the company’s continued support for the festival aligns with its commitment to advancing education and technology.
He said exposing children to emerging technologies such as artificial intelligence and robotics would better prepare them for the future, adding that private sector participation should complement government efforts in improving STEM education.
Some pupils who attended the festival said the practical sessions strengthened their interest in science and technology.
A student of Court Hill College, Opebi, Jason Lawal, said he participated in activities including a Rubik’s Cube challenge and an artificial intelligence masterclass where participants created short AI-generated animations.
Another student of Greater Ecstasy High School, Iyana-Ipaja, Fatima Namama said attending the festival over the years had deepened her interest in laboratory science and technology. She called for wider integration of STEM education into the school curriculum and more opportunities for pupils to participate in similar learning events.
The organisers said the festival’s impact extends beyond attendance figures, noting that some former participants have returned in recent years as exhibitors in coding and robotics, reflecting its contribution to nurturing future innovators.
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