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Nigeria’s National Petroleum Corporation reported oil and gas export revenues of US$416 million for June—a figure that is 35.78 per cent higher than May, with crude oil accounting for US$274.95 million, up from US$244.72 million a month earlier, Nigerian media report.
Africa’s biggest oil exporter has struggled recently to find buyers for its crude despite rising crude prices. Earlier this month, Reuters reported there were 15 unsold cargos for October delivery out of a total of 58. The cargoes for November loading are the most in six months, however, despite the fact that buyers have been reluctant to commit.
The October loadings totaled 1.652 million bpd, according to an earlier Reuters report, while the November loading program is to average 1.876 million bpd. That would be 17 percent higher than the loading program for November 2017.
Perhaps Nigeria would be able to benefit from the U.S. sanctions against Iran but it’s doubtful: Nigerian crude is priced against Brent, which is now trading around US$85 a barrel, while Iran is selling its crude at a discount to benchmarks, in some cases a considerable one, to preserve whatever it can from its market share after the sanctions kick in.
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Still, Nigeria is doing well on a year-on-year basis. The latest data from the country’s National Bureau of Statistics revealed Nigeria earned 17.38 percent more from exporting its crude oil during the first six months of 2018 than in the second half of 2017. Compared with the first half of 2017, Nigeria’s oil export revenues jumped by as much as 52.25 percent.
The West African nation is right now in the middle of preparatory work for a much-needed overhaul of its energy industry. The foundation of the overhaul, the Petroleum Industry Governance Bill (PIGB), however, has yet to be signed into law by President Muhammadu Buhari. Once this happens, hopes are that Nigeria’s oil company will become much more efficient and profitable. Yet there is a danger as well: the country could lose its OPEC member status as the reform envisages the float of 40 percent of NNPC or more. OPEC rules stipulate a member’s government needs to own at least 55 percent of the country’s oil reserves.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.