The Nigerian National Petroleum Corporation (NNPC) says oil revenue in the first ten months of the year exceeded the 2017 budget oil benchmark of $44.50 per barrel by 18 per cent.
Ndu Ughamadu, NNPC’s spokesperson, made this known in a statement on Monday. Mr. Ughamadu said that the corporation’s Group General Manager, Corporate Planning and Strategy, Bala Wunti, disclosed this during a presentation to the House of Representatives Joint Committee on 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The disclosure, the statement said, revealed that oil has sold at an average of $52.49 per barrel between January and October, adding that the 18 per cent recorded above budget benchmark was due to stability in the crude oil markets and various geopolitical dynamics around the world. The statement also explained that the federal government’s oil production target of 2.3 million barrels per day (mbd) in the 2018 budget was realistic and achievable, adding that the price projection of $45 per barrel was conservative and based on price scenarios of $35 at the lowest, $45 at the medium and $55 at the highest. Mr. Wunti, the statement said, stressed that most price forecasting agencies were of the view that the medium price scenario had the highest probability of occurrence on which the 2018 budget was hinged upon.
The NNPC official added that the current production capacity in the country was more than 2.3mbd but due to the insecurity in the Niger Delta region, full production capacity had not been achieved over the years.
“The 2018 crude oil national production projection for the joint ventures, modified carrier arrangements or external financing, production sharing contracts, independents, marginal fields and service contracts is about 2,298,000 barrels per day,” he said. The statement noted that Mr. Wunti expressed worry about oversupply of oil in the international market, adding that the outlook for the market was reassuring given the positive global economic growth and improved compliance by member countries of the Organisation of the Petroleum Exporting Countries (OPEC) and Non-OPEC members with production cuts. On crude oil production from January to October 2017, Mr. Wunti stated that average output stood at 1.885mbd, put at 86 per cent of the budgeted target of 2.2mbd. He, however, blamed the shortfall on Niger Delta security-related factors and vandalism of key export infrastructure, including the Trans-Forcados Pipeline (TFP), Forcados Oil Terminal (FOT) export line, Nembe Creek Trunk Line (NCTL) and Trans Niger Pipeline (TNP).