Nigeria might be under pressure to fund its N13.8 trillion 2021 budget following a significant drop of its oil output by 14.08 percent in the first 10 months of 2020, according to data obtained from the Organisation of Petroleum Exporting Countries, OPEC.
A breakdown showed that the nation produced an average of 1.5 million barrels per day, mb/d, (excluding Condensate) between January and October 2020, indicating a drop of 2.5 mb/d when compared to 1.7mb/d recorded in the corresponding period of 2019.
The dip in output has also been worsened by the prolonged lull in the international market, characterised by low prices of crudes, including Nigeria’s Bonny Light, which demand has been affected because of the resurgence of Coronavirus pandemic in many nations, including China that accounts for one-third of the global oil demand growth.
For instance, in its latest monthly Market Report, obtained by Energy Vanguard, yesterday, OPEC stated that the data were based on information obtained from official or direct sources.
This means that the nation’s 2021 budget, which was benchmarked on 1.86 mb/d, including condensate and $40 per barrel might be affected, considering that the nation’s cost of oil production has been estimated at $30 per barrel.
Nevertheless, the organisation, currently battling to achieve stability, noted that the global market was still haunted by weak demand.
It stated: “World oil demand for 2020 is expected to decline by 9.77 mb/d, marginally lower than in last month’s assessment. Weaker-than-expected data in the OECD in 3Q20, mainly due to lower transportation fuel demand in the US and OECD Europe, led to a downward revision of around 0.18 mb/d for the OECD group.