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Nigeria loses $2.7bn to oil production decline

By on February 26, 2013

Nigeria is estimated to have lost about $2.7 billion or N426 billion from decline in crude oil production in the last quarter of 2012 – October to December, even as it earned $16.075 billion or N2.54 trillion from crude oil export in the same period.

The Central Bank of Nigeria, CBN Fourth Quarter Economic Report, attributed the decline in crude oil production and export to natural disaster, oil theft and sabotage to oil infrastructure during the period under review.

As a result, Nigeria’s oil revenue in the fourth quarter of 2012 dipped by N112.6 billion, as gross oil receipts in the Federation Account stood at N1.824 trillion, dropping by 5.8 per cent from N1.936 trillion recorded in the third quarter of 2012.

The CBN data put Nigeria’s crude oil production, including condensates and natural gas liquids at 2.00 million barrels per day (mbd) or 184.00 million barrels during the fourth quarter of 2012, compared to the 2.26 mbpd or 207.92 million barrels recorded in the third quarter, representing a decrease of 0.26 mbd or 11.5 per cent in production level.

The report pegged the average price of Nigeria’s reference crude, the Bonny Light at $112.73 (N17,811.34) per barrel, with crude oil export at 1.55 mbd or 142.60 million barrels in the fourth quarter, compared with 1.81 mbd or 166.52 million barrels in the preceding quarter, representing a decline of 14.4 per cent.

Crude allocated for domestic consumption in the review period was valued at $4.667 billion or N737.386 billion, while actual allocation of crude oil for domestic consumption was put at 0.45 mbd or 41.40 million barrels.

However, the report indicated that it was not all woes for Nigeria, as, “At N1.824 trillion gross oil receipts, which constituted 75.6 per cent of the total federally collected revenue, exceeded the proportionate budget estimate and the receipts in the corresponding period of 2011 by 9.9 and 151.2 per cent, respectively, but declined by 5.8 per cent below the receipts in the preceding quarter.

“The rise in oil receipts relative to the proportionate budget estimate was attributed, largely, to the improvement in the receipts from Petroleum Profit Tax, Royalties and domestic crude oil and gas sales during the period.

“Available data showed that total federally-collected revenue during the fourth quarter of 2012 stood at N2.414 trillion, representing a decline of 0.4 and 13.3 per cent below the proportionate budget estimate and the level in the preceding quarter of 2012, respectively. However, relative to the level in the corresponding period of 2011, total federally-collected revenue rose by 101.1 per cent.”

Continuing, the report stated, “Provisional data on foreign exchange flows through the CBN showed that inflow during the fourth quarter of 2012 amounted to US$11.17 billion, representing a decline of 16.9 and 16.1 per cent below the levels in the preceding quarter and the corresponding period of 2011, respectively.

“Outflow amounted to US$7.82 billion, showing a decline of 3.3 and 44.5 per cent below the levels in the preceding quarter and corresponding period of 2011, respectively. This resulted in a net inflow of US$3.35 billion, compared with a net inflow of US$5.36 billion in the preceding quarter and a net outflow of US$0.79 billion in the corresponding period of 2011. The decline in inflow relative to the preceding quarter was attributed largely, to the 9.6 per cent fall in crude oil sales, while the fall in outflow was attributed to the 35.2 per cent decline in DAS

“Provisional data on aggregate foreign exchange flows through the economy indicated that total inflow amounted to US$32.24 billion, representing an increase of 4.1 and 27.9 per cent above the levels in the preceding quarter and the corresponding quarter of 2011 respectively.

“Oil sector receipts, which accounted for 31.3 per cent of the total, stood at US$10.09 billion, compared with the respective levels of US$11.16 billion and US$10.61 billion.”

 

[Vanguard]