Nigeria has regained its title as Africa’s largest producer of oil by exceeding Angola’s production by approximately 94,000 barrels a day.
In 2016 Angola’s crude oil production of 1.7 million barrels surpassed the 1.5 million barrels being produced in Nigeria, however seven months later Nigeria has regained its title as Africa’s largest producer of oil by exceeding Angola’s production by approximately 94,000 barrels a day. This renewed success once again pushes Angola into second place as Nigeria regains its top spot.
Nigeria’s production levels in 2016 dropped largely in part to synchronized militant attacks on their oil infrastructure facilities in the Niger Delta. The damage caused during these attacks has now been repaired and there have also not been any new significant attacks since June 2016.
New crude oil contracts have been awarded to a number of companies in 2017
When announcing the winners of the contracts, the state-owned oil company, the Nigerian National Petroleum Corporation (NNPC), reiterated its commitment to much better transparency and less secrecy in relation to the decision-making processes used when awarding the new contracts. This was as a direct result of a report from the BBC in which accusations of widespread corruption were made.
Over 220 bids were made for the 39 available contracts and both Nigerian and International firms have benefitted from the allocation of these new contracts. 18 have been awarded to Nigerian owned companies whilst the remaining contracts have been allocated to; 11 international traders, 3 National Oil Companies (NOC’s), 2 NNPC trading arms and 5 foreign refineries. Three of the largest international companies to benefit from this reallocation of contracts by the Nigerian National Petroleum Corporation (NNPC), by successfully acquiring one of the new contracts are France’s Total, China’s Sinopec and British Petroleum (BP).
All awarded contracts came into effect on January 1st, 2017 permitting the production of 32,000 barrels of crude oil per day per contract, Duke Oil limited was however the one exception as their contract permits them to produce 90,000 barrels of crude oil per day. The agreed total production levels from all of the 39 companies with newly awarded contracts, equates to over 1.3 million barrels of crude oil every day, which at current crude oil prices (as of March 3rd, 2017,) is worth almost $70 million dollars per day.
The health of Nigeria’s economy is still hugely reliant on oil sales, accounting for almost two thirds of all of its revenue
Whilst the Nigeria government is continuing to focus on further diversifying its economy to reduce the reliance it has on its oil sector, crude oil sales still currently remain an absolutely vital part of the country’s overall economy, hence the importance of the recent allocation of these 39 new contracts.
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