2018 Budget: 2019 Elections would sabotage Nigeria’s target for 2.3 mbpd crude output, says FBN

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The crude production target of 2.3 million barrels per day proposed in the 2018 budget will not be achieved because of acts of sabotage in the lead-up to the 2019 elections, FBNQuest Capital has predicted. FBNQuest, which made this assertion in its newly-released Economic Outlook, projected that oil output will average 2.07mbpd this year, as against 1.90 mbpd of 2017, due to expected disruption in production as activities towards the 2019 elections rev up.

It, however, acknowledged that production had been in the upswing since mid-2017 with the federal government’s fruitful effort to settle volatile issues in the Niger Delta.

“We see average output (including condensates) this year at 2.07 mbpd, compared with 1.90 mbpd in 2017 and the assumption of 2.30 mbpd in the 2018 budget proposals,” FBNQuest, which is an arm of FBN Holdings Plc., stated. “We have made allowances for some acts of sabotage in the run-up to elections. However, the broad trend in production has been upwards since mid-2017, and the FGN is maintaining its conciliatory approach in the delta. Also, Total’s deep offshore Egina oilfield is due to start production in Q4 at 200,000 b/d.”

It stressed, “There is metering of production in operation but it is carried out at export terminals by several agencies employing different methodologies. Consequently, there is no single unified official data source for production. This makes Nigeria unique among large-scale oil producers. It also places question marks around the value of all official planning and budget activity.

“We have, therefore, to choose from a number of data sources, including the NNPC, the CBN, Reuters, Bloomberg, the EIA in the US, and OPEC. Our favourite is the data series in the corporation’s monthly Financial and Operations Report.”

FBNQuest emphasised that on the basis of the expected further rise in crude output, to an average of 2.07mbpd, from the previous year’s 1.90 mbpd, it predicted a GDP growth of 2.4 per cent this year. Besides, the investment banking firm stated that it saw the non-oil economy in “better shape” in the second half of this year, marked by less restricted household budgets.

Stating that its call for 2018 would not be complete without a view on the naira exchange rate, FBNQuest stated, “The CBN’s unorthodox FX policies, which were first outlined in a circular in February 2017, have exceeded expectations (including its own).”

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Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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