Nigeria’s crude production is set to rise by another 540,000 barrels per day (bpd) this week, as Exxon Mobil and Shell’s loading schedules point to the resumption of Qua Iboe and Forcados oil exports at the end of September.
Militant attacks had put a lid on crude exports for the better part of the year, worsening an era of record low prices for the commodity dependent country and cutting its oil revenue predications by almost half.
Exxon Mobil’s Qua Iboe export stream, Nigeria’s largest, had been under force majeure since July, following a leak on the 48-inch pipeline that carries it to the export terminal. While the Shell Petroleum Development Company of Nigeria Limited (SPDC), which operates the Forcados terminal, had also declared force majeure on exports on February 22 after a sub-sea pipeline was damaged.
Shipments of Qua Iboe crude averaged 340,000 bpd last year, according to Bloomberg estimates, and Forcados averaged 200,000 bpd.
Both look to load their first cargoes since halting, on 28-29 September.
“The resumption in Qua iboe and Forcados oil exports could be potential game changers in the coming days,” according to Bismarck Rewane, an economist and the CEO of Financial Derivatives Company.
Nigeria’s record 2016 budget has grown increasingly untenable, as oil revenue on a prorate basis falls short of the targeted N820 billion.
Its local currency, the naira has also taken some bashing and the limit to defending it is ever more visible, after external reserves declined to less than $25 billion last month.
Nigeria was ousted as Africa’s largest oil producer by Angola in the second quarter of 2016, following a decline in output to 1.5 mbpd while Angola’s production output was steady at 1.7 mbpd.
An additional 460,000 barrels would boost Nigeria’s current 1.5 mbpd to the tone of 1.9mbpd, and would see Nigeria return to top spot in October.
The militant upsurge by Niger delta rebel groups had driven Nigeria’s crude production to 1.37mbpd in May, the lowest level in nearly three decades.
As Nigeria prepares a ramp up in oil exports, so is North Africa’s Libya, after state oil company lifted curbs on crude sales from the ports of Ras Lanuf, Es Sider and Zueitina, potentially unlocking 300,000 barrels a day of supply.
The expected supply from Nigeria and Libya could more than triple the global surplus that has kept prices at less than half their levels in 2014, analysts say.
Oil prices eased last week, pulled down by a technical sell-off following two sessions of strong rises and on caution ahead of a gathering of OPEC ministers next week in Algeria.
Brent crude sold for $47.57 a barrel last week Friday.