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Reduced Shipment Of Crude By Opec To Shrinken Nigerian 2013 Budget by Austinobisnr(m): 11:50am On Jan 28, 2013 |
The Organisation of Petroleum Exporting Countries (OPEC) reduced shipment of crude oil is expected to squeeze Nigeria’s 2013 budget assumptions. The oil cartel will reduce oil shipments through to early February as late winter demand fails to materialise in Asia, according to a research firm and tanker tracker, Oil Movements. The research firm says OPEC will export 23.7 million barrels a day in the four weeks to February 9, down 150,000 barrels, or 0.6 percent, from the previous period. BusinessDay reported last week that Nigeria’s budget projections may fail to materialise as a major revenue risk faced in 2013 will be achieving and sustaining the optimistic crude oil production targets set in the budget document. The National Assembly passed a N4.987 trillion budget for 2013 last December based on oil production of 2.5 million barrel per day; however, the crude oil production assumption contained in the 2013 budget was never achieved in 2012. Crude oil exports provide 90 percent of foreign exchange (FX) earnings and over 70 percent of the Federal Government budget. “There are concerns about the ambitious output assumption of 2.53 million barrels per day”, Razia Khan, regional head of research, Africa, at Standard Chartered Bank, said in a note on Nigeria’s 2013 outlook. “Despite recent success in boosting output, Nigerian production frequently falls below this level, and ‘augmentation’ from Nigeria’s excess crude savings (ECA) may be needed if output disappoints”. Nigeria’s ECA is supposed to contain savings over the budgeted benchmark oil price of $79 as passed by the National Assembly for 2013. It had $9.6 billion in it at the end of 2012 down from over $20 billion in 2007. The 2013 budget has a deficit projection of N887 billion (US$5.69 billion), which is to be financed from government’s domestic borrowing, a planned $1.0 billion eurobond issue in 2013 and proceeds from the privatisation of power assets. |
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