The Organisation of Petroleum Exporting Countries (OPEC), on Thursday agreed to cap the combined output of Nigeria and Libya at 2017 levels, i.e. not above 2.8 million bpd, a development that could affect Nigeria’s 2018 oil revenue projection and funding of budgetary allocations, Premium Times reports.
The Minister of State for Petroleum Resources, Ibe Kachikwu, who led the Nigerian delegation to the conference said Nigeria was allowed to continue to produce to meet about a 1.8 million barrels per day (bpd) cap, against Libya’s one million barrels per day. Although the production ceiling is below the average 2.3 million barrels production benchmark produced in the 2018 budget, Mr. Kachikwu said the country would have to put in more efforts to produce condensate and others not captured among pure crude by OPEC calculations.
Nigeria relies heavily on oil revenue to fund its budgetary allocations. The federal government says it wants to ensure adequate implementation of the 2018 budget when passed unlike the 2017 budget, which has recorded implementation below 50 per cent. But with the new development, however, the federal government may be forced to adjust its output estimate to 1.8 million barrels per day; a decision that would significantly affect projected revenue and other figures contained in the budget.