…as experts harp on gas, LNG expansion

By Udeme Akpan, Energy Editor

Despite an impressive leap in 2021, the price of Nigeria’s Bonny Light dropped year-on-year, YoY, by 40.8 per cent to $74.18 per barrel in June 2023, from $125.22 per barrel, recorded in the corresponding period of 2022.

The price of the nation’s premium crude had increased 73.4 per cent YoY to $125.22 per barrel in June 2022, from $72.21 per barrel in the corresponding period of 2021, thus impressing the federal government and oil companies that quest for much revenue to execute their projects and programmes.

But their fears have heightened as current data compiled by Energy Vanguard from the Monthly Oil Market Reports, MOMRs of the Organisation of Petroleum Exporting Countries, OPEC, indicated that on-month-on month, MoM basis, the price dropped by 1.9 per cent to $74.18 per barrel in June 2023, from $75.63 per barrel in May 2023.

Output rises 7.9% to 1.249 mb/d

The data, excluding condensate, further indicated that on a YoY basis, the output increased by 7.9 per cent to 1.249 million barrels per day, mb/d in June 2023, from 1.158 mb/d recorded in the corresponding period of 2022.

Also, on MoM basis, the OPEC data, based on figures obtained from direct or official sources, indicated that Nigeria’s output increased by 5.5 per cent to 1.249 mb/d in June 2023, from 1.184 mb/d in the preceding month of May 2023.

Budget 2023 not at risk

However, the implementation of Nigeria’s N21.83 trillion budget for 2023, based on the 1.69 mb/d and $75 per barrel was not affected as the nation has the capacity to produce additional 300,000 – 400,000 barrels of condensate, which attract the same value as Bonny Light on daily basis.

But there are indications that the nation did not meet its OPEC 1.74 mb/d quota, due mainly to the prolonged pipeline vandalism, oil theft and illegal refining in the Niger Delta.

Nigeria, African countries

The data indicated that Nigeria remains the leading oil producer in Africa, even though it occasionally lost its position to Angola, a close rival in the continent.

It also showed that Equatorial Guinea remains the least producer, which output stood at 62,000 bp/d in June 2023.

Experts harp on gas, LNG expansion

However, in a telephone interview with Energy Vanguard, weekend, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, advised the government to invest the nation’s oil revenue in developing its huge gas reserves.

“The country is endowed with huge gas reserves. The government should not depend on oil alone. It should invest massively to expand its stake in NLNG Limited. 

With the successful expansion from train 1 to the ongoing train 7, we should invest more in additional trains in order to maximize revenue from gas.”

Similarly, the Group Managing Director, UTM Offshore Limited, Mr. Julius Rone, said: “Special attention needs to be given to gas because we have very huge reserves. Look at Qatar. They have done a lot to develop their gas. They pulled out of OPEC to concentrate on gas.  They have done several trains of LNG and petrochemical plants. They have several fertilizer plants.  We need to do similar things in Nigeria.”

In a report obtained from its website, NLNG Limited, noted that, “NLNG has over the years paid dividends of about USD18 billion to the Federal Government of Nigeria courtesy of its shareholding in the company, via Nigerian National Petroleum Company Limited, NNPC.

“NLNG also contributes to national wealth and the economic wellbeing of states in which it operates, by paying all applicable taxes and tariffs. The company has paid about USD9 billion in taxes to the Federal Government of Nigeria.

“Payment to the Federal Government of Nigeria via its shareholding in Nigerian National Petroleum Company Limited, NNPC, for feed gas from inception till date is about USD15 billion.

“With its plant construction, the company generated considerable Foreign Direct Investment (FDI) for the country. NLNG has assets (i.e. property, plant and equipment) worth about USD17.5 billion with 51% stake by international oil companies and 49 per cent belonging to the country through the Nigerian National Petroleum Company Limited (NNPC).”