FG to earn more on $734bn net oil revenue forecast for OPEC members
The Federal Government may earn more revenue from crude oil this year than she envisaged thereby having a breathing space to executive many critical projects that could help boost economic activities.
This is because the Organization of Petroleum Exporting Countries (OPEC) net oil export revenues is being projected to rise to about $736 billion without any adjustment for inflation in 2018, according to a forecasts of global oil prices and OPEC production levels by the United States Energy Information Administration (EIA)’s August 2018 Short Term Energy Outlook (STEO) .
The expected increase in OPEC’s net export earnings is attributed to higher forecast annual crude oil prices in 2018 compared with 2017 despite expected lower output during 2018.
This means more revenues for governments of OPEC members countries, especially, a country like Nigeria where the government solely dependent on crude oil and the main source of export earnings.
In recent times the price of Brent which is the same thing as Bonny Light has been between $65 and $74 per a barrel. This means an average of $20 per barrel is being made.
Some industry watchers have said for Nigeria to derive maximum benefit from this development would depend on if the current relative stability being enjoined in the Niger Delta by oil companies is sustained.
The country currently produces an average of 1 .986,583 million barrels per day of crude oil, condensate inclusive but it has the capacity to produce about 2.9 million barrels of crude per day, according to an official source.
The 2018 federal government budget was benchmarked on a crude price of $51 per barrel and a production level of 2.3 million barrels per day and an exchange rate of N305 to $1.
The National Assembly passed the 2018 Appropriation Bill of N9.12 trillion, raised from the N8.61 trillion proposed by President Muhammadu Buhari on November 7, 2017.
Brent crude oil which is equivalent of the Nigeria’s Bonny Light spot prices averaged $74 per barrel in July, largely unchanged from the average in June. The agency expects Brent spot prices will average $72/b in 2018 and $71/b in 2019. While it expects that West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.
In 2017, Nigeria earned about $34 billion from crude oil revenue with about 60 per cent of this revenue to the government equity stake in the joint venture operations. The per capital income was however about $135
The agency forecast that OPEC crude oil production will average 32.3 million barrels per day (b/d) in 2018, 0.3 million b/d lower than in 2017. It however stated that the organisation’s revenues
For 2019, revenues are expected to be $719 billion, as a result of lower forecast crude oil prices. Slightly lower OPEC production and exports also contribute to the decline in expected earnings.
The U.S. Energy Information Administration (EIA) estimates that members of OPEC earned about $567 billion in net oil export revenues (unadjusted for inflation) in 2017. The 2017 net oil export revenues increased by 29 percent from the $441 billion earned in 2016, mainly as a result of the increase in average annual crude oil prices during the year and the increase in OPEC net oil exports.