*As oil firms’ bank borrowing rises to N5.68tn
OpeOluwani Akintayo
Lagos — Nigeria’s revenue from crude oil has continued to witness a downward trend despite increase in prices of crude oil at the international market, data sourced from newly released OPEC report has shown.
The April 2022 Monthly Oil Market Report, MOMR of the Organisation of Petroleum Exporting Countries, OPEC showed that the country’s earnings from crude oil, the country’s top money spinner, dropped by about N75.9bn in February and March this year despite the increase in global oil prices for the third consecutive month in March 2022.
Nigeria’s production in February and March this year dropped from 1,399 million barrels per day recorded in January, to 1,258 million barrels per day in February and then 1,238 in March.
This translates to a daily decrease of 35,000 barrels and 980,000 barrels in February 2022.
The country’s crude oil production crashed further by 744,000 barrels in March 2022.
Production drop of 1.378 million barrels per day recorded in February 2022 to 1.354 million barrels per day in March, implies a daily plunge of 24,000 barrels of crude oil.
This implies that for the 31 days in March, the country’s oil production dropped by a total of 744,000 barrels.
The average prices of Brent crude, the global benchmark for oil, in February and March 2022 were $97.13/barrel and $117.25/barrel, according to data from Business Insider.
The official exchange rate of the Central Bank of Nigeria during the two-month period under review was put at N416 to the dollar.
Therefore, by losing 980,000 barrels of crude in February, Nigeria’s oil earnings dropped by N39.6bn in that month.
It also plunged further by N36.3bn in March due to the loss of 744,000 barrels of crude in the month of March.
This implies that the country’s oil earnings during the two-month period dropped by N75.9bn.
Although Nigeria’s oil production quota by OPEC has revolved around 1.8 million barrels per day, the country has repeatedly missed production target due to oil theft.
The average prices of Brent crude, the global benchmark for oil, in February and March 2022 were $97.13/barrel and $117.25/barrel, according to data from the global statistical firm, Statistica.
The official exchange rate of the Central Bank of Nigeria during the two-month period under review was put at N416 to the dollar.
Therefore by losing 980,000 barrels of crude in February, Nigeria’s oil earnings dropped by N39.6bn in that month.
It also plunged further by N36.3bn in March due to the loss of 744,000 barrels of crude in the month of March.
This implies that the country’s oil earnings during the two-month period dropped by N75.9bn amidst the rise in global crude oil prices and the financial challenges confronting Nigeria as a nation.
International oil benchmark Brent climbed to $111.78 per barrel as at 10:19 AM Nigerian Time on Tuesday from an all-time low of about $10/barrel in 2020.
There have been reports of massive crude oil thefts ongoing in the country’s oil sector over the years.
However, the NNPC’s Group Managing Direction, Mele Kyari, announced recently that measurable outcomes against the massive crude oil theft in the Niger Delta would be visible in three weeks’ time.
Kyari had said, “As we speak now there is a massive disruption to our operations as a result of the activities of vandals and criminals along our pipelines in the Niger Delta area.
“This has brought down our production to levels as low as we have never seen before. Today we are doing less than 1.5 million barrels per day simply because some criminals have decided that they should have some infractions on our pipelines.”
“And that clearly is the biggest form of business disruption that we are facing today,” the NNPC boss had stated.
Meanwhile, combined bank borrowing of oil firms operating in the downstream and upstream subsectors rose from N5.19tn in January 2021 to N5.68tn in December 2021, showing an increase of N490bn.
Operators in the downstream, natural gas and crude oil refining subsectors borrowed N290bn from Nigerian banks in 2021 amid the significant rise in global crude oil prices, as debt owed by the oil and gas companies rose to N4.21tn in December from N3.92tn in January 2021, according to the data obtained from the Central Bank of Nigeria.
However, operators in the upstream and services sub sectors owed banks N1.47tn in December, an increase of N200bn from N1.27tn in January 2021.
The combined debt of N5.68tn owed by oil and gas operators (upstream and downstream) as of December 2021 represents 23.3 per cent of the N24.38tn loans advanced to the private sector by the nation’s banks, according to the sectoral f deposit money banks’ credit by the CBN.
Oil and gas firms received the biggest share of the deposit money banks’ credit disbursement to the private sector, according to the CBN data.
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