Since January 2024, Nigeria’s monthly oil output has consistently declined, costing the country approximately N636.3 billion in lost revenue.
According to data on oil production obtained from a Federal Government agency, Nigeria produced 1.43 million barrels of crude oil (excluding condensates) in January of this year, but by May, that amount had dropped to just 1.25 million barrels per day.
Figures obtained by our correspondent from the Nigerian Upstream Petroleum Regulatory Commission showed that while the total volume of crude produced in January was 44.22 million barrels, it dropped to 38.8 million barrels in May.
This represents a crude oil production plunge of 5.43 million barrels between January and May this year, based on NUPRC data.
The global benchmark for crude oil, Brent, was $80.12/barrel on average in January but increased slightly to $81.75 in May, based on data from the international statistical firm Statistica.
Also, the average exchange rate of the naira against the dollar in May this year was 1,434.1/$. The naira has been struggling since the Central Bank of Nigeria harmonised the country’s foreign exchange markets on June 14, 2023.
Based on the 5.43 million barrels crude oil production plunge, the price of Brent and the exchange rate of the naira in May, Nigeria lost an estimated revenue of about N636.3bn between January and May this year.
Nigerian crude oil production was further noted to have decreased from 1.43 million barrels per day in January to 1.32 million barrels per day in February, 1.23 million barrels per day in March, 1.28 million barrels per day in April, and 1.25 million barrels per day in May.
The continued plunge in Nigeria’s oil production has been blamed on the incessant vandalism of oil pipelines and crude oil theft.
adjustments by OPEC – FG
Although it has not been as successful as expected, the government has been working to address this issue.
The Nigerian National Petroleum Company Limited, for example, urged the judiciary to establish a special court to try those responsible for oil theft and pipeline vandalism on June 13, 2024.
NNPC’s Group Chief Executive Officer, Mele Kyari, made the plea at the National Judges Capacity Building Workshop on the Petroleum Industry Act 2021, organised by the National Judicial Institute and INVESTIN 234 in Abuja.
In addition, Kyari called on the courts to expedite trials for crimes involving pipeline vandalism and theft of crude oil, as stated in a statement released at the time by NNPC spokesperson Olufemi Soneye.
The NNPC helmsman further called for the support of the judiciary in tackling the twin challenges of crude oil theft and pipeline vandalism for the oil and gas industry to achieve its full potential as an enabler of national economic and industrial growth.
Our correspondent had exclusively reported that major oil companies lamented the impact of oil theft and pipeline vandalism on the availability of crude for local refineries.
The Director-General of the Lagos State Chamber of Commerce and Industry, Dr Chinyere Almona, identified crude oil theft and pipeline vandalism as factors hindering the oil majors’ inability to meet their daily quotas.
She also explained that modular refineries were finding it hard to get enough crude.
She also mentioned that Nigeria produces very little crude oil, so the Dangote Petroleum Refinery and other modular refineries cannot get crude from foreign oil companies.
