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Strong indication has emerged suggesting hard times for the smooth running of the 2020 budget which is expected to ride on stable rise in daily oil output this year.
However, figures from the monthly oil market report released by OPEC, show that Nigeria’s crude oil production (excluding condensates) plummeted from a historic high of 1.79mb/d in Q3-19 to 1.67mb/d in Q4-19.
Checks showed that even though the 2020 budget is predicated on 2.2mbpd output is yet to rise to 1.8mbpd in January.
This development is hardly surprising, as we had projected that Nigeria’s commitment towards complying with OPEC’s production agreement would put a cap on domestic oil production growth. Despite the decline, we believe higher condensates production, especially from the Egina oil field, will help to bridge the production gap.
At crude production of 1.77mb/d and an estimated condensate production level of 0.26mb/d, we project total crude production at 2.03mb/d for Q4-19. On the impact on the economy, a 2.03mb/d production level translates to a 6.28% y/y growth in oil GDP.
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