Nigeria flags oil output rise ahead of debt deal with majors

ABUJA (Capital Markets in Africa) – Nigeria’s oil production has risen to close to 1.8 million barrels per day (bpd), oil minister Emmanuel Ibe Kachikwu said ahead of the expected signing of a deal over repayments of $5.1 billion in debt from joint venture projects.

Kachikwu is due to sign the deal later on Thursday with oil majors ExxonMobil, Royal Dutch Shell, Eni and Chevron.

Nigeria has struggled with debt to oil majors amid the fall in oil prices over the past two years. It has also been hit by output falls from peak production of 2.2 million bpd as a result of persistent militant attacks in the oil-producing Niger Delta.

The Forcados crude stream, with roughly 300,000 bpd, has been under force majeure since February, and in the third quarter production was roughly 1.63 million bpd, according to the country’s statistics office.

The OPEC member nation’s fight to regain oil production enabled it to gain an exemption from a recent deal between the group and other oil producers to cut output to support prices.

“I wouldn’t worry about (non-compliance) issues,” Kachikwu said of the cut plan, adding that “everybody has” the October production figures from which countries agreed to cut.

Kachikwu said Nigeria’s primary goals for 2017 would be to secure “lasting peace” in the Niger Delta, gain external funding for oil investments and improve its oil refining system.

Nigeria’s oil refineries hit peak production for 2016 in October, but it was just 23.53 percent of their capacity, and with output of 210 million litres, only a fraction of the oil products the country needs.

NNPC has been importing as much as 90 percent of gasoline requirements due to a persistent shortage of foreign exchange also brought on in large part by falling oil prices.

Kachikwu said that while queues at petrol stations are gone, “there are still foreign exchange issues.”

Source: Reuters Africa News