A Review of the Nigerian Energy Industry

Oil sector accounts for 28% of Nigeria’s forex inflow

Ike Amos

19 October 2014, Sweetcrude, Lagos –
The oil and gas sector accounted for 28.4 per cent of the total foreign exchange inflow into the Nigerian economy in the second quarter of 2014, the Central Bank of Nigeria, CBN, has declared.

Specifically, the CBN, in its Economic Report for the Second Quarter of 2014, put receipts from crude oil export in the second quarter at $11.21 billion, about N1.79 trillion.

CBN corporate HqThis represented an increase of 14.15 per cent and 21.85 per cent when compared with crude oil export receipts of $9.82 billion and $9.20 billion for the first quarter of 2014 and the corresponding quarter of 2013, respectively.

According to the CBN, provisonal data on aggregate foreign exchange flows through the economy indicated that total inflow amounted to $39.46 billion, representing an increase of 8.1 and 6.0 per cent above the levels in the preceding quarter and the corresponding quarter of 2013, respectively.

The development, the CBN said, was attributed to the increase in receipts from crude oil export and non-oil export receipts through autonomous sources.

The CBN, however, stated that non-oil public sector inflow, at $1.46 billion, representing 3.7 per cent of the total inflow, rose by 264.2 and 504.6 per cent above the levels in the precedeing quarter and the corresponding quarter of 2013, respectively.

According to the CBN, autonomous inflow, which accounted for 67.9 per cent of the total, rose by 1.9 per cent above the level in the first quarter of 2014.

“At $13.06 billion, aggregate foreign exchange outflow from the economy, declined by 18.5 per cent below the level in the preceding quarter, but indicated an increase of 3.3 per cent above the level in the corresponding quarter of 2013.

“The decline, relative to the preceding quarter, was accounted for, mainly, by lower demand at the retail Dutch auction segment (rDAS). Overall, a net inflow of US$26.39 billion was recorded in the second quarter of 2014, compared with $20.48 billion and $24.57 billion in the preceding quarter and the corresponding quarter of 2013, respectively,” the CBN said.

The CBN disclosed that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged 1.91 mbd or 173.81 million barrels (mb) in the period under review, putting it at the same level as in the preceding quarter and dropping by 1.0 per cent, compared with the level in the corresponding period of 2013.

Continuing, the CBN stated that Nigeria’s crude oil export was estimated at 1.46 million barrel per day or 131.4 million barrels in the second quarter, same as the estimated level in the preceding quarter.

According to the CBN, despite government efforts to curb incessant crude oil theft in the Niger Delta region, the menace has continued to dampen crude oil production. The CBN added that allocation of crude oil for domestic consumption was 0.45 mbd or 40.95 million barrels during the review quarter.

The CBN stated further, “At an estimated average of $112.23 per barrel, the price of Nigeria’s reference crude, the Bonny Light (37º API), rose by 1.7 per cent above the level in the first quarter of 2014. The average prices of other competing crudes, namely the U.K Brent, the West Texas Intermediate and the Forcados also rose to $110.08, $98.74 and $113.07 per barrel, compared with $108.67, $96.10 and $111.44 per barrel, respectively, in the preceding quarter.

“At US$105.74 per barrel, the average price of OPEC’s basket of eleven crude streams rose by 1.0 and 4.8 per cent, above the average of $104.73/b and $100.90/barrel recorded in the preceding quarter and the corresponding period of 2013, respectively. “Improvement in world demand and escalating violence in Ukraine, which aggravated supply concerns, accounted for the increase in prices.”

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