Nigeria’s crude oil revenue has continued to slump as the Organization of the Petroleum Exporting Countries’ newly released Monthly Oil Market Report for September revealed that the country’s crude oil output fell to 900,000 barrels per day (b/d) last month.
According to the OPEC report, Nigeria’s crude oil production (according to data reported by direct sources) dropped from 1 million b/d recorded in July, to 900,000b/d in August.
This is as the price of the country’s crude grade, Bonny Light, also dropped by 10 per cent within the space of one month (July-August). Bonny Light, which was sold for $117/b in July, dropped to $106/b in August.
However, the country’s revenue from crude oil rose significantly year-on-year, as Bonny Light price rose by 64 per cent between 2021 and August 2022.
According to the report, the price of Bonny Light as of 2021 was $67 per barrel. However, this increased to $110 per barrel in August 2022.
Bonny Light is a light-sweet crude oil grade produced in Nigeria. It is an important benchmark crude for all West African crude production, and usually $1+ higher than international crude grade, Brent.
Nigeria’s crude oil production has been witnessing significant drops for some years now, as the country last recorded a 1.4mb/d in 2020.
Production gradually crashed further to 1.3mb/d at the beginning of 2021,and further to 1.2mb/d in the first quarter of this year.
As at the second quarter of this year, output dropped to 1.1mb/d, to 1mb/d in July, and 900, 000b/d last month.
Further checks revealed that the country’s rig count went from 16 recorded in 2019 to 10 in August 2022.
Despite the continuous rise in demand for OPEC crude, Nigeria’s low output puts its earnings at risk, as the country has been unable to benefit fully from the rise in demand.
Group Chief Executive Officer, Nigerian National Petroleum Corporation Limited, Mele Kyari, had, in an interview late last month, blamed the country’s low crude oil outputs on theft resulting from pipeline vandalism in the Niger Delta.
According to him, 295 illegal connections had been located around the pipeline, which, according to him, led to the shutdown of production.
On his part, Lawyer advising NNPC Ltd on oil and gas projects and transactions and partner at Bloomfield Law Practice, Ayodele Oni, advised the Federal Government to provide solutions to the oil theft challenges bedeviling the country.