Nigerian crude now on discount sale





Palpable danger now hangs over the fate of the 2013 Budget, following revelations that the nation’s key foreign exchange earner is currently selling at a discount price in some overseas spot markets.

Daily Sun reliably gathered at the weekend that there are still fears that several tankers of crude oil shipped out of the country may be lying idle in most off-shore locations, for lack of buyers. This may not be unconnected with the fact that United States of America, which is Nigeria’s key customer, has consistently been reducing her orders from the country in preference for cheaper energy sources.

This frightening news comes as the Nigeria National Petroleum Corporation (NNPC) said recently that the country could only produce about 1.9 million barrels per day in the month of March, as against the budget benchmark of 2.48 million barrels per day resulting in huge loss of revenue. Our sources hinted that the development which poses a real threat to the successful implementation of the 2013 budget could further have been triggered by the discovery of oil in several other African countries coupled with the large scale illegal theft of the nation’s crude by vandals.

Daily Sun learnt that but for the fiscal responsibility policy implemented by the Finance Minister, Dr Ngozi Okonjo-Iweala, which has built up the foreign reserve to about $48 billion, the nation’s estimated 170 million would have started feeling the gravity of the development. It was revealed that high grade crude oil discovered in some African countries like Ghana, Liberia, Uganda and Tanzania among others are really posing series threat to her exports to United States of America and parts of Europe and Asia.

Nigeria’s Bonny light rated as one of the best in the international market has since this year been selling at about $101 per barrel above the $79 budget benchmark. Recall that the Nigerian National Petroleum Corporation which announced a drop in crude oil production for the first quarter of 2013 had attributed the drop to incessant crude oil theft and vandalism along the major pipelines within the Niger Delta.

In a press statement signed by its Acting Group General Manager Public Affairs Division of the Corporation, Tumini Green, NNPC said Daily crude oil production during the period fluctuated between 2.1 and 2.3 million barrels per day (mbpd) compared with the projected estimate of 2.48mbpd. “Expectedly, this fall between actual production and forecast in first quarter 2013 has resulted in a drop in crude oil revenue of about $1.23 billion (N$191 billion) that should have accrued to the Federation Account,” she explained.

She further explained that the NNPC/SPDC JV recently declared a force majeure on Bonny Crude due to incessant crude oil theft. This resulted in the shutting in of 150,000 bpd. “Investigations showed that 53 break points were discovered along the 97km Nembe Creek Trunkline. Repair work is expected to last about six weeks.

This will further reduce our April and May monthly average to about 2.2mbpd and further decrease crude oil revenue by about $554.0 million (equivalent to N83billion) that should have accrued to the Federation Account. Green, however, assured that the maintenance work will have minimal effect on gas supply to domestic market.

“We shall continue to work with relevant government agencies both at the Federal and State levels to end this incessant crude oil theft and pipeline vandalism. We have the potential to meet the national target of 2.48mbpd if this menace is eliminated, she said, adding that crude theft and pipeline vandalism continue to degrade the environment, increase operational costs, impact negatively on the image of the country and of course, reduces revenue accruable to the nation.”




sun newspaper