FG cuts oil output by 400,000 bpd

There are indications that Nigeria may amend its N8.9 billion 2019 budget, following the recent oil output cut by about 400,000 barrels per day, bpd, in conformity with the Organisation of Petroleum Exporting Countries, OPEC, policy.

The nation’s budget was based on $60 per barrel and 2.3 million bpd price and output respectively. An investigation by Vanguard showed that Nigeria, which produced 2.2 million bpd in December 2018 had to cut its output to 1.9 million bpd, including condensate in January 2019, because of OPEC instruction.

It showed that, since then, the nation has consistently produced about 1.9 million, indicating 400,000 bpd below the 2019 budget projection.

It was gathered that the budget President Muhammadu Buhari sent to the National Assembly last year is undergoing second reading. A source at the Senate said in a telephone interview with BENGBENRO NEWS that at the end of the reading, the budget would be sent to the Joint Committee, involving the Senate and the House of Representatives for further deliberation.

He said at that stage, different ministries and agencies would be invited to appear and defend their budgets, after which various adjustments, including oil price and output benchmarks, would be made in the budget. It will be recalled that OPEC Secretary General, Dr Muhammad Barkindo, had on the need to cut oil outputs to stabilise price, said: “The goal of the voluntary production adjustments in the ‘Declaration of Cooperation’ was to stimulate and accelerate the drawdown of the huge stock overhang, expedite the re-balancing of the market, restore a sustainable stability to the industry and enable investments to return.

It was a decision taken in the interests of both producers and consumers and to help restore confidence to the market.”

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