A Review of the Nigerian Energy Industry

Nigeria’s oil output dropped in first half, gas rose – CBN

01 December 2012, Sweetcrude, Lagos – Crude oil output from Nigeria, Africa’s top oil producer, fell 2.3 percent in the first half of this year to 382 million barrels while gas production rose almost 25 percent to 34 billion cubic metres, the Central Bank of Nigeria, CBN, has said.

CBN said in its review of the economy for the first six months of the year published on its website that daily crude and condensate output averaged 2.09 million barrels a day compared with 2.14 million a year earlier. An estimated 6.02 billion cubic metres of gas was flared during the period, a 7.38 percent decrease year-on-year.

The drop in crude production was due to “increased vandalism of oil pipelines and crude theft in the Niger delta region,” the bank said, Friday, in the report.

Nigeria is a major source of U.S. crude imports. Attacks by armed groups targeting the oil industry cut more than 28 percent of output from 2006 to 2009, according to data compiled by Bloomberg. The West African nation lost $7 billion to these thefts in 2011, the central bank said. At least 150,000 barrels a day are siphoned by criminal gangs, Royal Dutch Shell’s Nigerian unit said in February.

Income from oil, representing 78 percent of total revenue, climbed 13.8 percent year-on-year to 4.36 trillion naira ($27.7 billion) and exceeded the budget estimate by 31.3 percent, the report showed.

“The increase in federally-collected revenue relative to budget estimate was largely attributed to the rise in oil revenue arising from high crude prices which averaged $115.05 a barrel in the international market,” the central bank said.

Africa’s most populous nation of more than 160 million people rely on oil for more than 95 percent of export earnings and 80 percent of government revenue, the Finance Ministry said.

Shell, Exxon Mobil Corporation, Chevron Corporation, Total SA and Eni SpA run joint ventures with state-owned Nigerian National Petroleum Corporation that pump about 90 percent of the country’s crude.

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  • The Nigerian oil and gas industry is subject to both the vagaries of technical, community related, OPEC constraints, among other domestic and international limitations.

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