24 July 2016, Lagos – The drop in Nigeria’s crude oil revenue in the first quarter of 2016, put at N53.72bn, is higher than the total amount the nation lost in the whole of 2015 (N51.3bn) as a result of incessant attacks on pipelines conveying petrol.
Nigeria’s crude oil export decreased by 7.81 million barrels between January and March 2016, down from 132.48 million barrels recorded in the preceding quarter, to 124.67 million barrels, the latest report from the Nigerian National Petroleum Corporation has shown.
According to the Central Bank of Nigeria and the NNPC, the average price of crude oil in the first quarter of 2016 was $34.39 per barrel, while the value of the local currency was estimated at N200 to a dollar during the period.
This puts the total crude oil revenue shortfall in the first quarter of year at $268.58m or N53.72bn.
According to different reports by the NNPC and the Central Bank of Nigeria, the crude revenue loss recorded in the first quarter of 2016 was mainly due to attacks on oil installations, particularly in the Niger Delta.
The Group Managing Director of the NNPC, Dr. Maikanti Baru, had on Thursday said that pipeline losses of the PMS volume of over 643 million litres valued at over N51.28bn were incurred in 2015.
This, therefore, means that the oil revenue losses recorded in the first three months of 2016 were N2.4bn higher than what the country recorded as the PMS losses in the whole of last year.
The CBN, in its economic report for the first quarter of 2016, stated that Nigeria’s crude oil production, including condensates and natural gas liquids, was estimated at 1.82 million barrels per day or 165.62 million barrels for the period under review.
This, it said, represented a decline of 0.07mbd or 3.7 per cent, relative to 1.89mbd or 173.88 million barrels produced in the fourth quarter of 2015.
The bank noted that crude oil export stood at 1.37mbd or 124.67million barrels, adding that this represented a decline of 4.9 per cent, compared with 1.44mbd or 132.48mb recorded in the fourth quarter of 2015.
It said, “Supply disruption owing to continued attacks on oil installations by vandals accounted for the decline in crude oil production. Deliveries to the refineries for domestic consumption remained at 0.45mbd or 40.95 million barrels during the review quarter.
“At an estimated average of $34.39 per barrel, the price of Nigeria’s reference crude, the Bonny Light, fell by 22 per cent, compared with the level in the fourth quarter of 2015. The average prices of other competing crudes, namely: the United Kingdom Brent, the West Texas Intermediate and the Forcados, at $33.64, $33.48 and $34.01 per barrel, respectively, also fell below their levels in the fourth quarter of 2015.”
The CBN further stated that the average price of OPEC’s basket of 11 crude streams, at $30.16 per barrel, indicated a fall of 24.4 and 40 per cent, compared with the average of $39.90/b and $50.30/b recorded in the fourth quarter of 2015 and the corresponding period of 2015, respectively.
Explaining the economic effects of the continued attack on oil installations in Nigeria, Baru stated that the 2016 national budget had been grossly impacted negatively.
The NNPC boss also appealed to the Nigerian military to help secure critical oil and gas infrastructure and curb the losses incurred by the corporation due to the nefarious activities of pipeline vandals and oil thieves.
Baru had said, “The 2016 National budget plan was based on 2.2 million barrels per day of crude oil production. However, the budget plan is now grossly impacted due to renewed militancy, with about 700,000bpd of oil production curtailed due to pipeline vandalism.
“Along with this menace is the incessant case of kidnapping of personnel and piracy in areas of operations. Other effects of these despicable acts include loss of lives, high cost of operations, refinery shutdown, fuel crisis and large scale environmental degradation and attendant cost of oil spill clean-ups.”