Oil market uncertainties will affect 2017 budget — Kachikwu

2017 budget, oil prices, Nigeria

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says the 2017 budget implementation will be affected by growing uncertainties in the global oil market.

Kachikwu made the statement at a news conference on Wednesday in Abuja.

He, however, said the Ministry of Finance and the Federal Executive Council were working on measures to cushion the impacts of the shortfall from oil production on the budget.

Kachikwu explained that while the oil production benchmark in the budget was 2.2 million barrels per day (mbpd), the country was producing about 1.7mbpd.

”In terms of the budget impact, definitely, I mean, it is predicated on the number of 2.2 million barrels per day and a price index of 42.50 dollars.

”Within the price cap, I think we’re still reasonably within range. Obviously we have lost quite a lot of months, some months, at least, two or three in which we did not produce what the budget had projected, so there is definitely going to be differential."

"Like you know, the Ministry of Finance is aggressively looking for ways to cover some of these shortfalls; part of that is efficiency, how do we cut down our expenditure? Obviously, certain capital items will be affected; if we do not have money, we cannot do certain capital projects that we have in the budget."

”There is no gainsaying the fact that budget will be impacted but we are working hard with the Federal Executive Council to see how we can forecast or predict that sort of impact and see how we can recover,” he said.

The minister added: "Over the last one and a half months, we’ve basically began to recover some of our assets that were vandalised and we’ve been getting a lot more cooperation from the militants that they are letting us continue to try and grow those barrels. That recovery is going to be gradual."

He stressed that Nigeria had been an active member of OPEC for 46 years and that was the reason behind some of the cut analysis and strategies that were got from Saudi Arabia and other countries. (NAN)

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Oil market uncertainties will affect 2017 budget — Kachikwu