The Nigerian National Petroleum Corporation (NNPC) is currently in a dispute with ExxonMobil and Shell on the ownership of physical crude cargoes as the country plans to bolster its budget.

Du to this disagreement, Nigeria’s monthly oil export programmes have been delayed and there has been confusion over the amount of crude the country has at its disposal to swap for gasoline and sell to fund its 2016 budget or use as collateral for its arrears.

The risks are very high for the country, as it is battling with the worst financial crisis in years and is also exchanging more oil for gasoline to the current fuel scarcity in the country.

Oil majors have been mandated to pay a huge sum to cover NNPC's share of joint venture project costs, but the issue is how much oil the state oil company gets monthly and how much it has to give to majors to cover expenses under PSCs which helps Nigeria export about 2 million bpd.

The declining oil prices in the global market has also been another issue facing the country. The lower the oil price, the more the cargoes required to pay companies under contracts. Sources have revealed that NNPC was taking much crude for itself than when the prices of oil was more than $100, thereby taking out of oil companies' shares.

Exxon had challenged NNPC, by failing to assign barrels from the Erha stream, delaying its loading programmes as NNPC had got six cargoes altogether, more than its share.

Meanwhile Shell is also in the same battle over Bonga crude.

The problem according to Reuters is expected to continue. Nigeria, depends on crude export for the majority of government revenues, but NNPC has been reporting losses.

The General Managing Director of NNPC, Emmanuel Kachikwu (photo), has said that so far the company owes around $3 billion in cash calls, and the finance minister has said that it plans to use money reserved for cash calls if revenue this year drops more than expected.

Nigeria is seriously in need of revenue to finance the proposed 6.06 trillion naira budget as well as repair its ailing refineries as it is also turning to its crude to ease the fuel scarcity in the country.

In March, Angola overtook Nigeria as African top oil producer for the second time, producing 1.778 million barrels in March thereby attaining a per day average of, an extra 18,000 barrels in February, while Nigeria’s production fell by 39,400 bpd to 1.722 million bpd.

“Over the past year, Nigeria's oil production was slightly higher than Angola's one with 1.8 million barrels per day and 1.76 million b/d respectively according to the International Energy Agency. Angola's crude is very stable but Nigeria's output is often subject to attacks against pipelines,” Francis Perrin, the Chairman of Strategy and Energy Policy and the Editor of Arab Oil & Gas told Agence Ecofin last week.

Anita Fatunji