Teaching Comparative Government and Politics

Thursday, May 24, 2018

Budget and economy under threat in Nigeria

If the Nigerian government is funded primarily by oil production, what happens if production falls? Will higher oil prices rescue everyone again?

Nigeria’s oil output drops by 150, 000 bpd under Shell’s force majeure
NIGERIA’s daily oil output has dropped by 150,000 barrels per day (bpd) as a result of the shutdown of Nembe Creek Trunk Line.

In its 2018 budget, the Federal Government had earlier projected to produce 2.3 million bpd at the reference price of $51 per barrel. But with this development the target would not likely be met.

But the development has not yet impacted on the market as Vanguard’s survey of the oil markets around the world showed that the price of Nigeria’s Bonny Light was still a little below $80 per barrel…

Investigation showed that despite increased government romance with stakeholders in the Niger Delta, the region has continued to record pockets of pipeline vandalism, meaning that oil operations may still under threats of disruptions.

In its latest report released about two weeks ago, Shell stated that… ‘’Security in parts of the Niger Delta remains a major concern with persisting incidents of criminality, kidnapping and vandalism as well as onshore and offshore piracy. Although there has been no damage to key oil and gas infrastructure caused by militant activity since November 2016, the security situation remains volatile in this region of the country.”

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