OPEC data shows Nigeria lost money due to low output
By Jeph Ajobaju, Chief Copy Editor
Nigeria lost $241.77 million (N101.39 billion) revenue in July as its crude oil production dropped by 2.3 million barrels compared with June, gleaned from figures compiled by the Organisation of Petroleum Exporting Countries (OPEC).
The latest Monthly Oil Market Report for August 2022 released by OPEC said based on direct communication figures, Nigeria’s output slashed by an average 74,000 barrels per day (bpd) which rounded up to 2.3 million barrels in the 31 days in July.
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OPEC confirmed the average price of Brent crude, the global benchmark for oil, was $105.12 per barrel in July.
Which means with a drop of 2.3 million barrels in output, Nigeria lost $241.77 million or N101.39 billion (at the official exchange rate of N419.37/$) in July.
OPEC figures also show Nigeria’s oil production fluctuated between 1.024 million bpd in May, up 1.158 million bpd in June, and down 1.084 million bpd in July.
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Oil price volatility
OPEC said crude oil prices dipped in July against June, with OPEC Reference Basket falling by $9.17 or 7.8 per cent month-on-month (MoM) to an average $108.55 per barrel.
“Oil futures prices remained highly volatile in July, amid a sharp drop in liquidity. The ICE Brent front month declined $12.38 or 10.5 per cent in July to average $105.12/barrel and NYMEX WTI declined by $14.96 or 13.1 per cent to average $99.38/barrel,” OPEC explained, per reporting by The PUNCH.
Fallouts of insecurity
Abuja, operators and experts all cite crude oil theft in the Niger Delta as the major reason for Nigeria’s low output and its failure to meet OPEC monthly production quota.
Centre for the Promotion of Private Enterprise Chief Executive Officer Muda Yusuf blamed the challenges in the oil sector on the high level of insecurity across the country.
He argued these discourage investors in the sector, leading to lower oil production and lower earnings for Nigeria despite higher oil price in the global market.
“Investors in the oil and gas sector continue to lament the challenges posed by insecurity, oil theft, unstable policies and inappropriate fiscal regimes.
“The downstream sector has continued to be weighed down by the pricing regimes and the regulatory environments which have continued to dim the growth prospects in the sector,” Yusuf said.