Nigeria loses N3.4tn as crude production drops

Okechukwu Nnodim

Crude oil production in Nigeria, including condensates and natural gas liquids, fell by 23.94 million barrels in the second quarter of this year, down from a total of 165.62mb in the preceding quarter to 141.68mb.

According to the latest economic report of the Central Bank of Nigeria, the estimated average price of Nigeria’s reference crude, the Bonny Light, during the review period was $46.44 per barrel.

This, therefore, implies that the country lost about $1.11bn (N3.39tn at the official exchange rate of N305 to one dollar) as a result of its inability to produce as much as it did in the first quarter of this year.

The apex bank in its report stated that Nigeria’s crude oil production was estimated at an average of 1.54 million barrels per day or 141.68 million barrels for the second quarter of 2016.

“This represented a decline of 0.37mbd or 15.4 per cent, relative to 1.82mbd or 165.62 million barrels produced in the first quarter of 2016,” it added.

The report further noted that crude oil export stood at 1.09mbd or 100.28mb and that this represented a decline of 20.4 per cent, compared with 1.37mbd or 124.67mb, recorded in the preceding quarter.

It said supply disruptions owing to continued attacks on oil installations by vandals accounted for the decline in crude oil production.

It added that deliveries to the refineries for domestic consumption remained at 0.45mbd or 41.40 million barrels during the review quarter.

It was report recently that crude production from Nigeria dropped the most in August among its peers in the Organisation of Petroleum Exporting Countries.

Nigeria had in March lost the status of Africa’s top oil producer to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd.

OPEC’s Monthly Oil Market Report for September showed that Nigeria’s oil output fell to 1.468 million bpd in August from 1.52 million bpd in the previous month, based on direct communication.

Nigeria had in July recorded the biggest increase in output, but it was not enough to help the country regain the top spot from Angola.

“Crude oil output increased mainly from Saudi Arabia and Iran, while Nigeria and Libya showed the largest drop,” the 14-member oil cartel said in the report.

Angola saw its oil output rise to 1.775 million bpd in August from 1.767 million bpd the previous month, based on direct communication, according to the OPEC report.

Libya’s production dropped to 292,000 bpd from 313,000 bpd, while Venezuela produced 2.104 million bpd, down from 2.117 million bpd.

Ecuador’s output fell to 542,000 bpd from 549,000 bpd, while Iraq’s production dropped by 2,000 barrels to 4.354 million bpd.

Saudi Arabia, the biggest producer in the group, recorded the biggest increase in August as it produced 10.605 million bpd, up from 10.577 million bpd in the previous month.

Iran, which had continued to increase output in a bid to snap up more market share after sanctions were lifted, produced 3.653 million bpd, up from 3.631 million bpd.

According to the report, Africa’s oil supply is projected to average 2.12 million bpd in 2016. This represents a decline of 20,000 bpd year-on-year and reflects an upward revision of 10,000 bpd from the August report.