Oil Sector GDP Contribution Drops By N270bn In Nine Months
The contribution of crude petroleum and natural gas sector, which is a subsector under the mining and quarrying sector, to Nigeria’s Gross Domestic Product dropped from N2.82tn in the first quarter of 2021 to N2.55tn in the third quarter, showing a N270bn or 9.57 per cent decrease.
This is according to data from the National Bureau of Statistics for the period under review obtained and analysed by our correspondent.
Despite being the main contributor to the mining and quarrying sector for the period under review, the contribution of the crude petroleum and natural gas sector decreased significantly in the second quarter and attempted a rebound in the third quarter.
In Q1 2021, the sector was the main contributor to the mining and quarrying sector with a share of 99.47 per cent, while contributing N2.82tn to the GDP.
In Q2 2021, there was a massive decline, with its contribution to the GDP dropping by N560bn or 19.86 per cent to N2.26tn.
It, however, remained the major contributor to the mining and quarrying sector with a weight of 91.88 per cent.
There was a slight rebound in Q3 2021 to cushion the decline. An increase of N290bn or 12.83 per cent pushed the sector’s contribution to the GDP to N2.55tn.
The subsector remained the main contributor to the mining and quarrying sector with a weight of 89.65 per cent annual contribution.
However, while there seems to be a slight increase in Q3 2021, its weight in the mining and quarrying sector was on a steady decline throughout the period under review.
Speaking on this development, an economist and the CEO of Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said that the sector had been affected by a number of factors such as insecurity, vandalism, policy uncertainty, challenging regulatory environment and weak investment sentiment.
He said, “The sector contracted by 10.73 per cent in the third quarter. Factors responsible include the disruption in the production arising from insecurity in the Niger Delta; crude oil theft and vandalism of oil production facilities.”
He listed other factors to include policy uncertainty and policy transitioning which affected the confidence of investors and a difficult regulatory environment which is not investment-friendly and weak investment sentiment.
A survey by Platts, a provider of energy and commodities information and a source of benchmark price assessments in the physical commodity markets, showed that Nigeria’s crude oil production dropped to 1.37 million barrels per day in October from 1.39 million bpd.
According to the survey, the country’s oil production in October was 261,000 bpd below the quota given to it by the Organisation of the Petroleum Exporting Countries and its allies.
It added that Nigeria’s oil output continued to be hamstrung by operational setbacks, with key pipelines facing persistent sabotage.
A new report by the Organisation of the Petroleum Exporting Countries also showed that Nigeria had lost its Africa’s top oil producer status to Libya as its crude oil production fell further in October.