By Adewale Sanyaolu
Nigeria’s $1.92 trillion oil revenue target for 2023 is set for a leap as Goldman Sachs Group Inc, in its outlook for oil, has reviewed its forecasts down as worries over the banking sector and potential for recession outweigh a surge in demand from China.
The analysts now see Brent reaching $94 a barrel for the 12 months ahead and $97 a barrel in the second half of 2024, versus $100 a barrel previously.
President Muhammadu Buhari, had while presenting the 2023 appropriation bill to a joint session of the National Assembly in Abuja, said that the Federal Government targets N1.92trillion in oil revenues in 2023.
The analysts now see Brent reaching $94 a barrel for the 12 months ahead, and $97 a barrel in the second half of 2024, versus $100 a barrel previously.
“Oil prices have plunged despite the China demand boom given banking stress, recession fears, and an exodus of investor flows,” the bank said in a March 18 note. “Historically, after such scarring events, positioning and prices recover only gradually, especially long-dated prices.”
Global markets have been roiled this week as turmoil at Credit Suisse Group AG triggered panic across markets. Oil has slumped to a 15-month low, with Brent dropping 12 per cent this week to below $73 a barrel.
Following the decline in prices, the bank now expects OPEC producers to only increase output in the third quarter of 2024, versus in the second half of 2023 which Goldman had estimated before the price rout.
Group Chief Executive Officer of Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari, had recently said Nigeria’s oil production could hit 2.2 million barrels per day in 2023.
In recent months, Nigeria has failed to meet the OPEC production quota as it struggles to combat oil theft which has affected production output.
According to data from the Organisation of Petroleum Exporting Countries, Nigerian production fell in the first seven months of the year to about 1.1 million barrels a day of crude equivalent in July from over 1.4 million barrels in January.
With an average of 1,083,899 barrels per day in July, Nigeria’s crude oil production plunged below one million barrels per day (972, 394 bpd) in August, the lowest ever in several years. In August last year, OPEC raised Nigeria’s oil production quota to 1.830 million barrels per day.
But Kyari assured that the country is making efforts to restore optimal oil production and meet the OPEC quota.
He said: “In our case, we have a different challenge other than just a lack of investment in the last four to five years. There has been no investment in the last four to five years. That is correct. That is true in many other jurisdictions where cash flows do not support the investment.
“We had a different challenge; the security challenge that became very manifest in early 2022. And of course, we took definite steps to bring back production and this is paying up.
“For instance, in around July, our net crude oil, excluding condensate, came down to around 1 million bpd. That is the lowest ever in the history of our country and our industry.”
The NNPC boss added that practical steps taken by the federal government to address issues related to pipeline security have led to a significant recovery in the country’s oil production.
“So for us, we see a trajectory of restoring production, including condensate, within the year.
“Definitely, we believe that we can hit our target of 2.2 million bpd but our OPEC target is 1.8 million bpd, but we know that it is practical to do 2.2 million within 2023,” he said.
He noted that there are ongoing construction works on some of NNPC’s pipelines “which will clearly make 1.8 million bpd very easy” to attain.
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