Nigeria’s official oil price stagnates
- May loading worsens country’s sale overhang
Over 20 cargo-loads of Nigeria’s crude oil, last weekend, suffered bearish sale unsold over worsening buyers’ apathy, forcing Nigeria to keep the April official selling price (OSP) for the four key grades Bonny Light, Qua Iboe, Bonga and Forcados unchanged.
May loading programmes for more grades of Nigerian crude, loading schedule sighted by this newspaper showed, emerged just as the country’s cargoes left over remained unsold amid slowing Asian demand. Escravos, the schedule showed, will have six cargoes, or 163,000 barrels per day (bpd) in May. Usan will have three cargoes, or 92,000 bpd. “Around 20 cargoes remain for April loading,” the schedule showed, adding: “Programmes for most key grades remained absent, a day after it emerged the Qua Iboe stream will load nine cargoes or 276,000 bpd.”
Nigeria, through the Nigerian National Petroleum Corporation (NNPC) was, due to these market reality, forced to keep the April official selling price (OSP) for the four key grades, Bonny Light, Qua Iboe, Bonga and Forcados, almost unchanged. The Corporation said that it was on track to produce 2.3 million bpd in 2019, 400-600,000 of which it currently classes as condensate and not crude.
Exxon sought to sell two cargoes of April-loading Nigerian Qua Iboe and one of Erha, but no buyers appeared to have emerged Nigeria’s central bank expects the economy to pick up in 2019, forecasting gross domestic product growth of three per cent, up from the 1.9 per cent recorded last year.
April-loading cargoes were clearing and neared zero after an overhang of a little under 10 earlier in the week, a higher-than-normal excess after heavy demand earlier in the year. Traders see slackening Chinese demand exerting downward pressure on West African differentials.
NNPC has also guaranteed that the 2.3 million barrels per day production benchmark set for the 2019 budget would not fail. Group Managing Director of NNPC, Dr. Maikanti Baru, who, according to a statement, said this in a presentation to the Senate Committee on Finance on the 2019 – 2021 Medium Term Expenditure Framework (MTEF), assured that measures have been emplaced to attain the set mark.
With improved security in oil bearing communities as a result of sustainable community partnership, the Industry, Baru said, was confident of attaining the production target. NNPC GMD who was represented at the event by Mr. Bala Wunti, Group General Manager, Corporate Planning and Strategy of the Corporation, informed that though the country had production capacity of over 2.5mbld, the unfortunate security situations of the past in areas of operation made it difficult to achieve desired production targets.
“Thankfully, the current administration under President Muhammadu Buhari is strongly focused on engagement and sustainable community partnership which has resulted in improved security and production. This will further improve and we are thus confident of achieving the 2019 budget production target,” the statement issued by Group General Manager, Group Public affairs, Ndu Ughamadu, quoted him to have said.
On the possible impact of the Organisation of the Petroleum Exporting Countries (OPEC)’s quota, on Nigeria’s production target, NNPC GMD explained that the production target of 2.3 million barrels per day was a combination of liquid hydrocarbon production comprising of crude oil and condensate, noting that the OPEC quota only covers crude oil production.
He further explained that with Nigeria’s condensate production currently oscillating between 400,000 to 600,000 barrels per day, the country was in a good position to attain the overall production benchmark, saying that the corporation was working assiduously with other relevant agencies to ensure the attainment of the 2019 budget assumptions contained in the 2019 – 2021 Medium Term Expenditure Framework (MTEF).
The GMD stressed that NNPC’s mandate on the MTEF was on the key thematic indicators of Production Volume, Crude Oil Price and Unit Crude Oil production Cost.
Baru also informed that Nigeria’s crude oil grade traded higher than Dated Brent, attributing the development to the recent reforms in the crude oil management regime with emphasis on entrenching pricing transparency and performance.
He restated NNPC’s commitment to transparency and efficiency in every aspect of its operations, stressing that under his watch, the corporation had recorded considerable gains in all the thematic indicators. To further deepen the culture of pricing transparency in the corporation, the GMD stated that a standing-pricing review committee meets monthly to review crude and products pricing in accordance with the market dynamics.
SOURCE: newtelegraphng.com
