Oil Earnings Crashed By N288bn In Q3, 2022

Nigeria’s oil earnings have gone southward amid rising crude thefts among other factors.

Nigeria’s earnings from crude oil crashed by N287.95bn in the third quarter of 2022 as a result of the incessant theft of the commodity in the Niger Delta, the Federal Government has said.

Oil production figures obtained on Sunday from the Nigerian Upstream Petroleum Regulatory Commission, an agency of the Federal Government, showed that oil output dropped by 1.15 million barrels in July 2022, when compared to what was produced in the preceding month.

Nigeria produced 34.75 million barrels of crude oil in June, but this dropped to 33.6 million barrels in July.

In August, the country’s total oil production was 30.14 million barrels, indicating another crash in output. Hence, Nigeria lost 3.46 million barrels of oil in August, when matched with what was produced in July.

The oil production losses continued in September, as total output for the month was 28.13 million barrels. Oil production fell by 2.01 million barrels in September when compared to what the country pumped in August.

From the above analysis, it therefore implies that Nigeria’s oil production in the third quarter of 2022 dropped by 1.15 million barrels in July, 3.46 million barrels in August, and 2.01 million barrels in September, making a total of 6.62 million barrels.

Data from Statistica, a global statistical firm, showed that the average cost of Brent, the international benchmark for crude oil, was $111.93/barrel, $100.45/barrel and $89/barrel in July, August and September 2022, respectively.

By losing 1.15 million barrels in July, it therefore implies that Nigeria’s oil earnings dropped by $128.72m (N56.44bn at the official exchange rate of N438.5/$) in that month.

With a drop in production of 3.46 million barrels in August, the country lost $347.56m (N152.4bn) in the review month.

Oil earnings again dropped in September, following the loss of 2.01 million barrels of crude worth $180.42m (N79.11bn).

A summation of the losses for the three-month period indicated that the country’s oil earnings crashed by N287.95bn in the third quarter of this year.

Oil theft has denied Nigeria billions of dollars, as the country’s production has remained stunted due to the menace.

Nigeria has consistently failed in meeting its monthly crude oil production quota approved by the Organisation of Petroleum Export in Countries.

Just recently, the Federal Government revealed that its latest findings showed that about 1.2 million barrels of crude oil was consistently shut-in by producers across various oil wells in the Niger Delta due to the incessant oil theft in the industry.

It also stated that current statistics showed that the volume of oil lost to theft in Nigeria was about 100,000 barrels per day, translating to an estimated three million barrels every month.

The government disclosed through the NUPRC at the press briefing in Abuja, as it further stated that the country’s gas reserves had risen to 208 trillion standard cubic feet.

“One of the negative and side effects of crude oil theft is that it has incentivised well shut-ins by producers, in the sense that it is not part of their investment model to produce and hand over to thieves,” the Chief Executive, NUPRC, Gbenga Komolafe, had stated.

On crude volumes being stolen, Komolafe said, “By our estimates, the current volume we are losing as a result of crude oil theft oscillates between 80,000 to 100,000 barrels per day.”