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What lifting of force majeure on Qua Iboe export terminal means for Nigeria

What lifting of force majeure on Qua Iboe export terminal means for Nigeria

For the first time in almost six weeks after a fire at the terminal halted operations, Exxonmobil has lifted a force majeure on Nigeria’s Qua Iboe terminal in Akwa Ibom State, as crude export is expected to resume in February 2021.

According to preliminary loading program seen from S&P Global Platts, Nigeria’s Qua Iboe crude oil stream will load seven cargoes at a daily rate of 215,000 barrels per day (bpd) in February 2020 while five cargoes will be in loaded in March at a daily rate of 170,000 barrels per day (bpd).

This will be the first export of Qua Iboe since December 15, 2020, after a fire incident at the facility injured two workers.crude produced mostly by Exxon Mobil from the fields 20 – 40 miles off the coast of Akwa Ibom is brought to the shore at the Qua Iboe terminal via a seabed pipeline system.

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Implication for Nigeria

If the recent prices of crude oil is sustained in 2021 and Nigeria is able to maintain its current oil production level, there are indications that the Federal Government may be on course to meet and perhaps surpass the projected oil revenue target in the 2021 budget.

For most investment analysts, Nigeria also stands the chance of reducing the budget deficit estimated at N5.2 trillion and government’s borrowing to fund the budget if the on-going surge in the international oil price is sustained for the rest of 2021.

“If an oil price above US$50 per barrel takes root in 2021, it will be tempting to think of the nation returning to normal and maybe surpass 2021 targets. Normal, in this instance, means a healthy inflow of US dollars from oil that supports the revenues of the government,” analysts at Coronation Merchant Bank, said.

The federal government is expecting oil revenue of N2.01 trillion, thanks to an oil price benchmark of $40 per barrel, while daily oil production is benchmarked at 1.86 million barrels per day