23 December 2018, Sweetcrude, Lagos — Nigeria’s revenue from oil, and gas dropped by 75 percent, a newly released oil and gas industry report by the Nigeria Extractive Industries Transparency Initiative, NEITI, has disclosed.
The year 2015 witnessed a crash in oil price from above $100 per barrel to below $30p/b due to an oil glut, forcing countries like Nigeria into recession.
The report said the earning from the year under review was the lowest in a decade, and the fifth lowest since democracy in 1999.
In 2016 aggregate earnings from the sector crashed by over 31 percent from over $24.79 billion in 2015 to about $17.05 billion.
Compared to the highest revenue of $68.44 billion in 2011, the NEITI report, which covers 1999 to 2016, showed the 2016 figures plunged by over 75 percent.
“The plunge in revenue in 2016 resulted from the double whammy of low oil prices in the global market,” NEITI Executive Secretary, Waziri Adio said.
According to him, aside from the crash in prices, Nigeria’s low oil production as a result of unrest in the Niger Delta also contributed to lower revenue.
Other points from the report were that the oil and gas sector contribution to the country’s gross domestic product, GDP dropped from 9.5 percent in 2015 to 8.3 percent in 2016; total gas produced in 2016 was 3.05 trillion standard cubic feet (SCF), out of which 288.21 billion SCF, or 9.45 percent, was flared.
Also, about 126 million barrels of oil valued at $5.48 billion, or about N1.37 trillion was allocated for domestic consumption during the year.
From the allocation, about 23 million barrels (18 percent) was allocated for local refineries; 55.9 million barrels (45 percent) for Direct Sale-Direct Purchase (DSDP) scheme; 36.6 million barrels (29 percent) for the Pipelines and Products Marketing Company (PPMC) lifting, and 10.4 million barrels (8 per cent) for offshore processing arrangement.
From the money for domestic crude allocation (DCA), the NNPC deducted about N512 billion upfront for Joint Venture (JV) cash call, N126.5 billion for pipeline repairs and maintenance, N99 billion for under-recovery from petroleum products imports and N20 billion for crude losses.
Also, a total of 101 million barrels of crude oil valued at $4.4 billion was recorded as losses due to theft and sabotage, with SEPLAT Petroleum and Shell Petroleum Development Company (SPDC) alone accounting for over 81 million barrels of crude oil as losses due to sabotage. About 20 other entities reported 19.8 million barrels as losses due to theft.