Gov’t’s oil projections grossly understated -- ACEP

The Africa Centre for Energy Policy (ACEP) has described as “grossly understated” government’s 2013 oil revenue projection of US$581.7million based on projected oil production of 83,341 barrels per day and a crude oil price of US$94.36 per barrel.

“In our view, the projected production volume of 83,341 barrels per day is highly conservative considering that Jubilee’s peak production of 120,000 barrels has been rescheduled to the middle of 2013 with the year’s production starting at about 111,000 barrels per day,” a press release from the energy policy think-tank said.

“We also estimate that crude oil price for the year will average a little above US$100 per Barrel, on account of the estimated global economic growth at 3.5% for the year (World Economic Outlook) compared with 3.2% in 2012,” the statement said.

ACEP said its position is underscored by “a wide variation between the Government's crude oil projection and that of Kosmos Energy, which put the expected average production between 105,000 and 115,000 barrels of oil per day in 2013, with the midpoint of the range representing an increase of greater than 50 percent from the 2012 average.”

In a follow-up interview, the Executive Director of ACEP, Mohammed Amin Adam, told the B&FT that although government may be trying to “moderate expectations” since they could not meet previous targets, it is imperative that the right information is given to the public.

“In their attempt to moderate expectations they also appear unrealistic; and therefore if they receive more than they have projected, are they going to say they have done better? Are they going to say Jubilee is doing well? Meanwhile, it is not necessarily the case that Jubilee is doing well -- but it is because we under-projected and so we think that the right information should go out to the public for purposes of proper budgetary planning and for proper tracking by citizens,” he said.

To ensure transparency in oil revenue management, ACEP said even as it recognises the efforts of Government in acknowledging the role of the Public Interest and Accountability Committee (PIAC), “Government must give meaning to this acknowledgement by providing the PIAC with adequate resources to carry out its mandate in line with Act 815.”

The Government has projected in the 2013 Budget Statement that total receipts from oil will be US$581.7million based on projected oil production of 83,341 barrels per day and a crude oil price of US$94.36 per barrel.

Thus, an estimated crude oil volume of about 6 million barrels will be lifted by the Government and the GNPC as the country’s share of petroleum.