Nigeria must increase its crude oil production to meet the 1.86 million barrels per day target estimated in the 2021 Appropriation Bill.
This was the submission of oil and gas experts on Friday during an interview.
The stakeholder stated that the oil price benchmark of $40 per barrel was conservative.
The stakeholders said the benchmark price was expected due to the impact of the COVID-19 pandemic.
It would be recalled that President Muhammadu Buhari on Thursday presented a N13. 08 trillion budget proposal to the National Assembly with the exchange rate pegged at N379 per dollar.
The 2021 budget has a recurrent expenditure of N5.65 trillion; personnel cost, N3.76 trillion; while debt servicing is put at N3.12 trillion.
Ms Tengi George-Ikoli, Programme Coordinator, Nigeria Natural Resource Charter, said the projection for oil production should have been lower because Nigeria had not made new significant finds in a while.
She said, “If we estimate our budget on production that is unrealistic, we will be creating more issues for ourselves and working on a deficit.
“So, I would have expected a bit conservative estimate in that regard because our average production currently is about 1.2 million bpd.’’
George-Ikoli noted that there was no provision for fuel subsidy in the budget but expressed concern over the amount set aside for debt servicing.
She said, “However, we feel this is understandable because we borrowed a lot due to COVID-19.
“We are looking toward the passage of the Petroleum Industry Bill (PIB) which will help attract oil and gas investments.
“We heard that by the end of October there will be a public hearing and all hands are on deck to properly review the bill and make sure that the gaps that still exists will be addressed.’’
According to her, stakeholders need to work together to ensure a full and sustainable deregulation and revenue management in the petroleum sector.
George-Ikoli said the oil and gas industry was negatively affected by the coronavirus as prices of crude oil in the global market dropped.
“We believe that Nigeria needs to have other revenue streams. We need to diversify and add value to our production because Nigeria only focuses on exportation of crude.
“We need to do more than that; we need to open the downstream as well as the midstream and this can be done through the PIB,’’ she said.
Mr Wilson Opuwei, the Chief Executive Officer, Dateline Energy Services Ltd., said the performance of the 2021 Budget would be dependent on the outlook of the global crude oil market.
Opuwei said, “All we need to do for our economy is to make sure that we create ventures that will generate revenues for the nation, specifically in exploration and production so that we can shore up our production.
“This will increase productivity rather than just having revenue for the purposes of expenditure. Instead of taking loans to finance this expenditure, we should create ventures that will generate revenue for the nation.
“I believe Nigeria as a nation is capable of running itself with the right market strategies in place.’’
He lauded the President for the early presentation of the budget, adding that it showed good planning.
Opuwei said, “An annual budget cycle ideally should start from January and that is what this government has done.
“The National Assembly knows that whatever they are doing must end before the end of the year so that implementation can begin from January. So, I think it is a good step.’’
Mr Clement Isong, Executive Secretary, Major Oil Marketers Association of Nigeria, described the $40pb oil price benchmark as a good and reasonable figure.
Isong said, “We can only pray that it will be better than that so that we can improve the revenues of our country.
“I think in terms of timely presentation, we are getting better and more efficient.
“We are now able to present the budget to the National Assembly within the relevant time and hopefully they will be able to work on it and pass it in good time.’’