The Minister of State for Petroleum Resources, Dr
Ibe Kachikwu, says the 2017 budget
implementation will be affected by growing
uncertainties in the global oil market.
Kachikwu made the statement at a news
conference on Wednesday in Abuja.

He, however, said the Ministry of Finance and the
Federal Executive Council were working on
measures to cushion the impacts of the shortfall
from oil production on the budget.
Kachikwu explained that while the oil production
benchmark in the budget was 2.2 million barrels
per day (mbpd), the country was producing about
1.7mbpd.
”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 dollars.
”Within the price cap, I think we’re still reasonably
within range. Obviously we have lost quite a lot of
months, some months, at least, two or three in
which we did not produce what the budget had
projected, so there is definitely going to be
differential.
”Like you know, the Ministry of Finance is
aggressively looking for ways to cover some of
these shortfalls; part of that is efficiency, how do
we cut down our expenditure?
“Obviously, certain capital items will be affected; if
we do not have money, we cannot do certain
capital projects that we have in the budget.
”There is no gainsaying the fact that budget will be
impacted but we are working hard with the Federal
Executive Council to see how we can forecast or
predict that sort of impact and see how we can
recover,” he said.
Kachikwu said Nigeria would in time join in the
production cut initiated by the Organisation of
Petroleum Exporting Countries (OPEC) and non-
OPEC members led by the Russian Federation to
stabilise the market.

He further said Nigeria, though committed to the
deal, would have to get to a predictive level of
comfort to voluntarily join in the production cut.
”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 dollars per barrel.
‘’So, there is a bit of upsurge trajectory which is
good, which means the price for Nigeria is
probably in the 46 dollars type range.’’
He said the price was ‘’below the 50-dollar mark
which is where we’ll feel comfortable’’.
Kachikwu said there were a lot of reasons for the
situation, including ‘’a lot of aggressive shale
production, and obviously barrels coming out from
Nigeria and Libya because of the exemption’’.
He said Nigeria has begun to recover gradually.’’

The minister added: ”Over the last one and a 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.
”That recovery is going to be gradual.
‘’We’ll still have below the benchmark set for us by
OPEC and I think that over the next one or two
months, hopefully, we can get to that point when
we can say the recovery has been tested, is
systemic, and predictable.
“We need to watch that for a couple of months so
that we can get to a predictive comfort and then
we voluntarily go to OPEC and see how we can
contribute.’’

He stressed that Nigeria had been an active
member of OPEC for 46 years and that was the
reason behind some of the cut analysis and
strategies that were got from Saudi Arabia and
other countries.

CC LALASTICLALA
CC MYND44
www.financialwatchngr.com/2017/07/13/2017-budget-will-affected-uncertainties-oil-markets-kachikwu/

It has taken these guys over two years to run in circles.

Oil production increase today, alternative financing tomorrow type of trial and error governance; at the expense of a hemorrhaging economy.

porka:
It has taken these guys over two years to run in circles.

Oil production increase today, alternative financing tomorrow type of trial and error governance; at the expense of a hemorrhaging economy.

It majorly has to with the instability in oil price and not the FG .
If you had properly read the article you'd understand that we may not generate enough to meet the projected revenue. We are still recovering from the militancy. Our hope now lies on the oil price. The higher, the better for us.

What is government doing to mitigate the fall in oil price?

aolawale025:
What is government doing to mitigate the fall in oil price?

You can only diversify. This alone, is not the function of the FG. States have to key into it too.
Agricultural revolution.

Where they voted in to give excuses or proffer solutions

CROWNWEALTH019:
Where they voted in to give excuses or proffer solutions

It is either you deliberately neglected the "solution proffering" part of the article or you are just naturally ignorant.

cc lalasticlala