Nigeria’s oil output could rise with Bonny Light - CNBC Africa

Nigeria’s oil output could rise with Bonny Light

Western Africa

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An oil rig.

“The offline situation with Bonny had obviously affected Nigeria’s exports, particularly with the lifting of cargoes for Bonny Light, which we know is one of the most demanded crude grades from Nigeria, which had attracted premiums,” Ecobank Group head of oil, gas and energy research Rolake Akinkugbe told CNBC Africa.

“We’re likely to see perhaps up to 200,000 barrels a day in addition back on the market, primarily for the Bonny crude stream."

Nigeria's oil sector has however been marred with oil theft, which is said to cost the country between 300,000 and 400,000 barrels of oil per day. 

The potential increase in the Bonny Light crude grade is good news for the country, as production had taken a serious hit in Nigeria.

This is due to a combination of factors including outages, oil theft and the slight slump in demand in the first half of the year.

“In terms of whether it actually leads to an increase in revenue is another thing. This particular stream of Bonny was previously on the market, then was taken off the market, now is back,” Akinkugbe explained.

“Essentially we’re back to earlier levels of production. Whether that feeds into an increase in revenue will depend on how much support there is for the Bonny crude price, which has typically commanded between three and five dollars premium over the Brent crude mark.”

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Rwanda has however suspended its acquisition plans for ConocoPhillips, which would have entailed a 17 per cent stake in the 15 million dollar Brass LNG project.

“It’s not entirely clear what their reasons are. They’ve been looking at raising funds for this particular acquisition for some time, since earlier this year and late last year, when it was announced that ConocoPhillips was selling its stake in Brass LNG,” said Akinkugbe. 

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