By Emeka ANAETO

Expectations are all high across upstream stakeholders in Nigeria for a better fourth quarter 2016 (Q4’16) at the backdrop of the removal of Force Majeure on Forcados Export Terminal (FET) and prospect of a fruitful meeting between Niger Delta leaders and the Presidency schedule to hold  barring any further emergency rescheduling.

Industry operators told Sweetcrude that the removal of the Forcados Force Majeure should boost oil production from multi-year trough of 1.6mbpd in first half of 2016 (H1 16) to 1.9mbpd in Q4’16.

A top executive in one of the international oil companies said “in the event that talks and the current security arrangements hold firm, the development would allow Nigeria to benefit from the recent recovery in Brent crude which should boost fiscal coffers by 18 per cent by our estimates”.

In H1’16, lower oil production and prices drove oil revenues lower by 41 per cent year-on-year, YoY, to N1.2 trillion, leading to a 30 per cent YoY decline in Gross fiscal receipts to N2.4 trillion, about 48 per cent lower than budget estimates.

“Assisted by higher conversion of export petro-dollars, following the over 50 per cent depreciation of the Naira, we see a rebound in fiscal receipts over Q4 16”, an oil sector analyst in ARM Investment stated.

However, the timing of the recovery and the high base in Q4’ 15 (2.2mbpd) constrains scope for a return to positive growth in oil GDP in Q4’16.

But the tamer contraction in oil GDP should drive mild pull-back in the overall growth from the 2.2 per cent GDP contraction.

Oil industry analysts estimate that beyond the near term, the resumption of Forcados raises prospects for lifting of similar force majeures along other oil production platforms, in particular Qua Iboe (300kbpd).

This also indicates upturn in the toplines for upstream operators.

Specifically Shell Petroleum Development Company, SPDC, Seplat Petroleum Plc and a few others are already in activity upbeat along the Trans-Forcados Pipeline, TFP.

The development is a positive for Seplat which owns 45 per cent of three OMLs (OMLs 4, 38 and 41) that operate along the TFP.

The company had released its Q3’16 results last week indicating continued pressures as a result of the Force Majeures.

But the company’s Head of Corporate Communications, Dr. Chioma Nwachukwu, told Sweetcrude that Q4’16 is looking up indicating that topline would be better.

Last month, the Presidency announced the resumption of crude exports from the 250-300kbpd TFP terminal in the Niger Delta region following completion of repairs after a militant attack in February this year.

A director in SPDC, Mr Andrew Brown, had informed President Mohammadu Buhari in a meeting, of the resumption of activities at the Forcados terminal following its restoration.

Shell in partnership with other two companies (Axion Energy Argentina SA and Pampa Energia SA) have purchased 1 million/bbl of Forcados crude grade set for delivery in November.

However, some industry observers do not expect significant recovery in production in Q4 16.

Currently, they assume working interest production of around 29,490boepd (-32% YoY) for 2016 full year estimate, while estimating that production from OMLs, 4, 38  and 41 would be around 25,668boepd.