Report: Nigeria Incurs N720 Billion Revenue Loss Due to Decreased Crude Oil Production
As reported on April 15, 2024, Nigeria faced a significant revenue setback amounting to approximately N720 billion due to consecutive declines in crude oil production during February and March of the same year. The inability to meet the crude oil production benchmark set in the 2024 budget exacerbated the financial impact.
The 2024 budget had established a crude oil production benchmark of 1.78 million barrels per day, encompassing both crude oil and condensate. However, data from the April 2024 Monthly Oil Market Report of the Organisation of Petroleum Exporting Countries (OPEC) revealed a consistent decrease in Nigeria’s crude oil production (excluding condensates), plummeting to 1.231 million barrels per day in March, marking the second consecutive monthly decline since the year began.
OPEC’s findings indicated a stark drop from 1.322 million barrels per day in February to 1.231 million barrels per day in March, reflecting a decline of 91,000 barrels per day. Furthermore, data from the Nigerian Upstream Petroleum Regulatory Commission revealed that crude oil and condensates production failed to meet the benchmark in January, February, and March, with production volumes of 1.643 million barrels per day, 1.539 million barrels per day, and 1.438 million barrels per day, respectively.
Analysis of OPEC’s data revealed that Nigeria lost 105,000 barrels of crude oil daily in February compared to the preceding month, resulting in a total loss of 3,045,000 barrels for the month. Similarly, March witnessed a loss of 91,000 barrels per day, amounting to a total loss of 2,821,000 barrels for the month. Based on the average exchange rates and crude oil prices during these months, the cumulative revenue loss for the two-month period amounted to N720 billion.
Nigeria’s Minister of State for Petroleum Resources, Heineken Lokpobiri, attributed the decline in crude oil production to challenges faced by the Trans Niger Pipeline and maintenance activities conducted by oil companies across the country. Assurances were given that measures were being taken to address the situation and restore production levels to previous standards, aiming for a return to approximately 1.7 million barrels per day.
Efforts were emphasized on policy evolution to maximize the utilization of available wells in Nigeria, with the objective of stabilizing foreign exchange reserves and fulfilling infrastructure commitments outlined in the 2024 budget.
