Boost for Nigeria’s oil production as exports of Forcados crude rise in July

Nigeria’s daily crude oil production is optimistic of improving output as Trans-Forcados pipeline (TFP), one of Nigeria’s largest export terminals, is set to rise in July, according to a trading document seen by Reuters.

According to preliminary export programmes seen by traders, exports of Nigerian Forcados crude were due to rise in July while volumes from the Bonga stream will fall slightly.

The data also showed Forcados will load 263,000 barrels per day (bpd) in July, up from 245,000 bpd in June, while Bonga will load 123,000 bpd in July, down from 127,000 bpd the previous month.

This development is expected to boost Nigeria’s struggling oil production which will help the three levels of government benefit from rising oil prices, shore up the nation’s foreign debt position and inadvertently strengthen the stability of the exchange rate.

Read also: IMF: Nigeria to pay N6trn for oil subsidies in 2022

Last week, Nigeria’s minister of finance, Zainab Ahmed, minister of finance, budget and national planning, said the current plight of Nigeria’s oil production is making it impossible for the country’s oil and gas revenue to cover the cost of imported petrol.

“We are not seeing the revenues that we had planned for,” Ahmed told Reuters on the sideline of the World Economic Forum (WEF) in Davos last Thursday.

She said the federal government hopes that oil production will average 1.6 million barrels per day (bpd) this year.

Data released by the Central Bank of Nigeria (CBN) showed Nigeria earned a total of N4.133 trillion from its oil and gas resources in 2021, dropping by 12.68 per cent compared with total oil and gas earnings of N4.733 trillion recorded in 2020.

Giving a breakdown of oil revenue for 2021, the CBN reported that in the first and second quarters of the year, N956.114 billion and N918.462 billion oil earnings were recorded respectively, while in the third and fourth quarters, the country recorded gross oil revenue of N1.143 trillion and N1.115 trillion, respectively.

The CBN further stated that earnings from Petroleum Profit Tax (PPT)/Royalties stood at N834.06 billion in the fourth quarter of 2021, as against N833.19 billion in the third quarter of 2021; domestic crude oil and gas sales fetched the country N234.05 billion in the fourth quarter, compared to N276.66 billion in the third quarter; while ‘other’ oil earnings stood at N31.38 billion, compared with N32.85 billion in the third quarter.

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