The 2019 budget has just received a boost as the very first cargo of crude oil from Total’s new Egina oil field hit the international oil market for futures trading.
According to Reuters, the new Nigerian oil “grade has been added to the February loading programme”.
Following forward trading in the oil market, the first cargoes from Total’s newly producing Egina offshore field, will load in February 2019, while contracts can be agreed upon in advance.
Total, China National Offshore Oil Corporation (CNOOC), and Nigerian National Petroleum Corporation (NNPC) will each have a cargo of Egina in February, traders confirmed to Reuters on Thursday.
IMPLICATION FOR 2019 BUDGET
While presenting the 2019 budget, President Muhammadu Buhari told the joint session of the national assembly that the executive had set oil production benchmark at 2.3 million barrels per day — as it was in 2018.
The president, however, acknowledged that Nigeria did not produce as much as the budgetary benchmark in 2018, but expressed optimism for 2019.
“In 2018, average oil production up to end of the third quarter was 1.95 mbpd, as against the estimated 2.3 mbpd for the entire year,” Buhari had said.
Despite producing just 1.95 million barrels per day for the better part of 2018, the president said Egina will come on stream and add 200,000 barrels per day to Nigeria’s production capacity.
“With regard to the oil and gas sector, crude oil production continues to increase steadily towards budgetary targets and will receive a further boost when the 200,000 barrels per day Egina oil field starts operations,” he added.
Based on Thursday trades on the international oil markets, Egina will indeed be raising Nigeria’s production capacity to 2.15 million barrels per day as soon as February 2019.
This will, in turn, generate more revenue for the Nigerian government, for the implementation of the 2019 appropriation bill.
The $3.3 billion floating production storage offloading (FPSO) vessel for the Egina deepwater oilfield departed for the oilfield in August 2018 — and is expected to create 3,000 jobs in five years.