Nigeria maintained revenue forecast for this year’s budget based on daily oil production of 2.2m barrels despite output falling over the April, reaching a 22 year low currently. The government of Africa’s biggest economy is keeping price assumptions at $38 per barrel, Budget Minister Udoma Udo Udoma told reporters in the capital, Abuja, Bloomberg reported.
Nigeria recently dropped to second place behind Angola as Africa’s largest oil producer following a resurgence in militant attacks and leaks in the nation’s oil-producing Niger River delta region. Damages inflicted on oil infrastructure run by companies including Chevron and Royal Dutch Shell have “massively diminished” income, according to oil Minister Ibe Kachikwu who said production was standing at 1.4mbp/d.
In a recent country analysis cited by Reuters, the US Energy Information Administration noted that pipeline sabotage and oil supply disruptions had increased in 2016, putting direct pressure on the country’s finances. “Because Nigeria heavily depends on oil revenue, its economy is noticeably affected by changes to its oil production and/or to global crude oil prices,” the report said.
President Muhammadu Buhari has said there would be a crackdown on “vandals and saboteurs” in the country’s oil-producing Delta region, analysts said the violence could scare investment away from the country.