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Obaseki sees growth driver in Egina oilfield

Amid cautious economic projections for the nation’s economy by experts in the new year, Edo State Governor, Mr Godwin Obaseki, has assured that the recent addition of Egina production facility to the bouquet of income streams in the country, will sustain growth in the oil sector.

Obaseki in his 2019 Budget Speech at the Edo State House of Assembly, said: “Our expectation for growth in 2019 is an expansion of 2.5% in Gross Domestic Product (GDP), an improvement over the expected growth of 2.1% in 2018.”

He added that “While crude oil price may decline, we hope that the increase in oil production to 2.3mbp/d due to additional output from areas like the Egina field, will sustain growth in the oil sector.”

The Egina deepwater oilfield achieved first oil production, recently, helping to push Nigeria’s oil output beyond 2.09 million barrels per day in December.

According to Total, the field, which is located around 1,600 meters of water depths, 150 kilometres off the coast of Nigeria, started up production on December 29, 2018.

At plateau, the Egina field will produce 200,000 barrels of oil per day, which represents about 10 per cent of Nigeria’s production, a statement on the Total’s website said.

Total described the Floating Production Storage and Offloading (FPSO) unit used to develop the giant Egina field as the largest one it had ever built, and added that the project also involved a record level of local contractors.

The governor further said that “In the non-oil sector, we expect a sustained positive performance in manufacturing and services due to higher consumer spending (as higher government revenues which are ensuring the settlement of outstanding salary obligations across states and a new minimum wage, will boost household income).

“In agriculture, we expect a boost in 2019 as governments move to enhance stability and productivity in this sector.”

Obaseki’s positive outlook dovetails with the views of experts at Vetiva Research in their analysis of Nigeria’s economic trends in 2019.

“With a growth Projection of 2.7 per cent year-on-year, we expect Nigeria’s economy to accelerate in 2019, driven by likely election spending and continued recovery in the manufacturing and services sectors,” Vetiva analysts said.

Commenting on the outlook for the global economy, analysts at Goldman Sachs said: “The global economy looks poised to slow moderately from 3.8% in 2018 to 3.5% in 2019, led by deceleration in the US and further softening in China.

“But with growth still above potential in most developed economies, Goldman Sachs Research expects continued labour market tightening, gradually rising core inflation, and in many cases higher policy rates.