Big oil has generated eye-watering…
Oil prices are on track…
Nigerian company Forte Oil announced on Friday that it was in talks with one of the country’s major refineries to enhance the African nation’s low post-production processing capabilities, according to a new report by Reuters.
“We are aggressively pursuing M&A opportunities along the energy value chain,” Forte CEO Akin Akinfemiwa said in a meeting with investors. The firm is also in the process of acquiring small oilfields to increase its total production rate.
By 2019, Nigeria plans to process in-country all fuel that is needed for domestic consumption.
Despite being Africa’s largest crude oil producer, Nigerian refining capacity is low, which has forced the government to spend foreign currency reserves on purchases of refined oil goods. Building new refineries within the country’s borders would allow Lagos to revitalize aging oil facilities while preserving foreign currency resources.
Nigeria’s oil industry and economy suffered in 2016, not only from the low oil prices, but also from persistent militant attacks on oil infrastructure that have crippled crude oil production. The sabotages reduced Nigeria’s output from more than 2 million bpd at its highest point in 2015 to 1.4 million bpd last summer, the lowest production level in 30 years. The militant groups have slowed attacks in recent months, allowing output to recover marginally.
Related: Is Russia Poised To Own A Stake In U.S. Oil?
Due to the domestic strife, Nigeria was exempt from the OPEC production-cut deal, but since the cartel struck the agreement at end-November, Nigeria has been gradually lifting output, possibly undermining efforts by fellow OPEC members who are trying to keep supplies low. During the OPEC summit in May, the bloc’s members agreed to extend the cuts, while allowing both Nigeria and Libya to continue their exempt status through March 2018.
Recently tough, Abuja announced that it would cap output at 1.8 million barrels per day once production reaches that level later this year.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…