Oil Price May Affect 2017 Budget Implementation - Kachikwu

Oil Price May Affect 2017 Budget Implementation - Kachikwu

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said the growing uncertainties in the global oil market may affect the implementation of the 2017 budget.

Dr. Kachikwu who briefed newsmen in Abuja noted that Nigeria was already coming short of the projected oil production levels which the budget was premised on.

While the oil production benchmark in the budget was 2.2 million barrels per day (mbpd), Nigeria is currently producing about 1.7mbpd of oil without condensate, and was still within the price band of $42.50 per barrel which the budget has.

He said: "In terms of the budget impact, definitely, I mean, it is predicated on the number of 2.2 million barrels per day and a price index of $42.50. Within the price cap, I think we're still reasonably within range.

"Obviously we've lost quite a lot of months, some months, at least two or three in which we didn't produce what the budget had projected, so there is definitely going to be differential," Kachikwu said.

He said the Federal Ministry of Finance was working to find other means of cushioning the budget shortfall especially by improving efficiency and applying cost cutting strategies.

On the adherence to the oil production cut posed by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members, the minister said Nigeria's production level was unpredictable as to guarantee when it will join the deal which is meant to stabilise oil price.

"We're fairly in consensus of what our position is, there is no disagreement on that, but just to set the record straight, the price of oil today is hovering around $44.70 cent per barrel, so there is a bit of upsurge trajectory which is good, which means the price for Nigeria is probably in the $46 type range.

He noted that: "Over the last one and half months, we've basically began to recover some of our assets that were vandalised and we've been getting a lot more cooperation from the militants that they are letting us continue to try and grow those barrels, but that recovery is going to be gradual, we'll still have below the benchmark set for us by OPEC," Kachikwu explained.

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