In an analysis of OPEC data and the average price of crude in Q2 2022 gleaned from global oil price reports, Nigeria’s oil revenues fell by about N703.76 billion, or the value of the 14. 94 million barrels of crude were lost during the review period.
In OPEC’s data on crude oil output, which is based on direct communication from its 13 member nations, Nigeria produced 1.299 million barrels of oil per day in the first quarter of this year.
But this dropped to 1.133 million barrels per day in the second quarter, indicating a plunge of 166,000 barrels per day.
This implies that for the estimated 90-day period in Q2 2022, the country could not produce or lost about 14.94 million barrels of crude oil.
Data obtained from the global statistical firm, Statistica, showed that the average prices of crude in April, May, and June this year were $104.58/barrel, $113.34/barrel, and $122.71/barrel respectively.
This implies that the average for the quarter under review is $113.54/barrel. Therefore by losing 14.94 million barrels in Q2, 2022, Nigeria’s oil earnings plunged by about $1.696bn (N703.96bn at the official exchange rate of N415/$)
The Federal Government as well as operators in the oil sector have repeatedly decried the plunge in Nigeria’s oil production, as they often attribute it acts of vandalism by oil thieves.
In his reaction to the concern, the Managing Director, Seplat Energy Plc, Roger Brown, said there was a need for more synergy between the public and the private sectors to address this issue.
Brown, who spoke at the just concluded 2022 Nigeria Oil and Gas conference in Abuja, explained that Nigeria had abundant resources of crude oil and gas, but stressed that this could only translate to value if properly harnessed.
“It’s clear that on the oil side, the theft levels are just unsustainable. We have a crippling economy because of it and that has to be solved,” Brown stated.
He added, “On the gas side, it’s about fixing the value chain from gas to electricity, from molecules to electrons across the country and getting it right.
Also at the just concluded conference, the Group Managing Director, NNPC, Mele Kyari, revealed that the decline in the funding of oil investments had virtually led to a halt in the drilling of crude oil by operators in the sector except for the national oil firm.
Speaking on the challenges in the industry, the NNPC boss stated that though there were other concerns in the business, the issue with reduced funding had impacted severely on the sector.
Kyari said Nigeria was number one in terms of oil reserves in Africa, adding that “we should be the number one producer of oil, but today we have our challenges, which my colleagues (earlier speakers) have pointed out.
“Yes, there are engagements going on and the support that we are getting from government security agencies and the leadership that the Minister of State is giving us to make sure we address this issue around security.
“But that is not only the problem we have. We have seen a clear natural decline that is happening in our industry today and this is real. And when such decline comes and you are not able to put money to put it back, no one is drilling today except NNPC by the way, and a few others.”
He added, “So if you don’t drill and decline continues, then you are not only going to see the effect of theft and other vandal actions that we are seeing today, you are also going to see the collateral effect of lack of investments.”
