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Nigeria leads in crude oil production in Africa

Jan 10, 2015   •   by   •   Source: Proshare   •   eye-icon 2134 views

 

Nigeria came top in crude oil production in Africa for the month of February with Angola that was several times, last year, the leader of the continent coming second. Nigeria produced 1.959 million bpd. Nigeria’s production peaked 1.959 million barrels per day even as output against January production level was put at 1.991 million barrels per day and December witnessed the highest production level of 2.008 million barrels per day.

 

These production figures indicate the relative peace enjoyed in the Niger Delta. At the peak of the crisis, especially between June and July, last year, the nation’s production level went down to as low as 1.6 million barrels per day. It was during this period that Angola came up as the leader of crude oil production in the continent. For instance, her production level increased to a multi-year high of 1.946 million bpd, from 1.889 million bpd and 1.853 million bpd, respectively.

 

Nigeria’s output declined 1.6 percent Month-on-Month (MoM), but rose 9.1 percent Year-on-Year (YoY), while Angola’s production edged up 3.0 percent MoM and 18.2 percent YoY.Relative stability in Nigeria’s oil-rich states following the offer of amnesty to militants operating in the region appears to have contributed to a turnaround in output since late 3Q09. Accordingly, the sustainability of the peace process will be a critical issue in the medium term to ensure the production levels discussed above are sustained.

 

According to Renaissance Capital, the oil growth in Nigeria will probably be in positive territory in 2010, given the likelihood of higher annual oil prices and output, offsetting relatively sluggish non-oil metrics (with the exception of agriculture). In an optimistic scenario, the oil production target included in the 2010 budget (2.088 million bpd) could still be outperformed, supporting the anticipated fiscal expansionary stance and mitigating the actual budget deficit.Furthermore, this could incrementally boost the Central Bank of Nigeria’s (CBN) level of non-excess crude account foreign reserves and help maintain exchange-rate stability (NGN150/$1).

 

This would also allow the National Bank of Angola to contain the exchange rate at about AOA90/$1 as the foreign reserve position eventually improves, in addition to the current tight monetary stance which should ultimately curb excess demand for dollars and as market confidence picks up somewhat. 

(Source:BusinessDay)

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