Nigeria Overstates 2014 Oil Production Forecast – S&P

Nigeria Overstates 2014 Oil Production Forecast – S&P

From Vanguard via AllAfrica

Global rating agency, Standard & Poor’s, S&P, yesterday, raised concerns that Nigeria’s crude oil production forecast of 2.39 million barrels a day in the 2014 budget, was over-estimated.

This, according to the rating agency, was due to increased tension in the Niger Delta region and the forthcoming 2015 general elections.

Ravi Bhatia, an analyst at S&P, said: “It’s a concern if they have a big rise in pre-election expenditure and there’s a big revision on the oil price or there is a production shortfall due to Niger Delta tensions. High global oil prices are helping to sustain the picture as it stands now.”

Bhatia described as optimistic, the 2.39 million barrels a day projection put forward by the Presidency to the National Assembly

According to him, a $10 to $15 fall in the global oil price might change the fiscal equation for Nigeria, adding that ” the country is very sensitive to oil prices.”

He said Nigeria would not achieve a substantial increase in production until it passed the long-delayed Petroleum Industry Bill.

Bhatia noted that Nigeria’s Excess Crude Account had been drawn down quite significantly, adding though that it was still enough to provide a slight buffer.

Written by Michael Eboh | Read more at AllAfrica