Nigeria: Excess Revenue Rises to $6.35 Per Barrel As Oil Price Hits $66.35

Buhari speaks with Special Envoy of King Salman Bin Abdulaziz.
18 February 2019

For the first time in 2019, the price of crude oil has surged from $64.00 recorded last week to $66.35 over the weekend as a result of Organisation of Petroleum Exporting Countries, OPEC efforts targeted at eliminating excess oil from the volatile market, thus leading to an increase in the nation's excess oil revenue.

The nation's N8.83 trillion budget was benchmarked at $60.00 per barrel and 2.3 million barrels daily output, including condensate.

But the prices of Bonny Light, Nigeria's premium oil grade, Brent, WTI and OPEC Basket stood at $66.35, $ 66.25, $ 55.59 and $64.28 per barrel respectively, yesterday.

Consequently, the nation recorded excess revenue of $6.35 per barrel, the highest in recent times.

But all may still not be well with the budget as the Ministry of Petroleum Resources report obtained by Vanguard showed that the nation has not yet been able to produce 2.3 million barrels daily.

The report disclosed that the nation's output dropped from 2,081,936 barrels per day, bpd recorded in December 2018 to 1,999, 292 bpd in January 2019.

Shell report

In its latest report, Shell Petroleum Development Company Limited also stated: "Although there has been no damage to key oil and gas infrastructure caused by militant activity since November 2016, the security situation remains volatile in this region of the country. Operations at the SPDC JV's Forcados Oil Terminal, FOT, were disrupted until late May 2017 while repairs to the export line were completed after three sabotage incidents in 2016.

"This resulted in loss of revenue, particularly for domestic producers who rely on the FOT for export. Facilities operated by both indigenous and international oil and gas companies continue to be vandalised by attacks and other illegal activities such as crude oil theft.

"This led to lower oil and gas production in 2016 particularly for indigenous producers and incidents of environmental contamination.

"The consequences also included a loss of revenue for the Federal Government of Nigeria and disruptions to gas supply to power electricity for industry, businesses and public-sector services.

"The safety of staff and contractors in Nigeria remains the top priority. Shell Companies in Nigeria aim to mitigate security risks that may impact people, the environment and assets - thus operations are carried out only where it is safe to do so."

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