NIGERIA lost a total of $10.246 billion (about N4.2 trillion) in crude oil revenue in the first six months of 2022 due to its inability to meet the daily production quota set by the Organisation of Petroleum Exporting Countries (OPEC), Nigerian Tribune investigation has revealed.
The shortfall, which is about a quarter of the 2022 budget, is more than the N4 trillion allocated for fuel subsidy in the budget.
Federal government had projected 1.8 million barrels daily crude oil production projection for the 2022 budget.
However, the highest production figure recorded in the first half of the year was 1.4 million barrels, thus exacerbating the government’s precarious revenue situation.
According to data sourced from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in January, Nigeria produced an average of 1.4 million barrels per day (mbd) totaling 43.4 million barrels per month (bpm) instead of the daily production figure of 1.683 million bpd and 52.2 million bpm allocated to it by OPEC.
Consequently, with the average crude oil price for the month at $86.5 per barrel, the country only earned $3.757 billion as crude oil revenue, instead of $4.51bn, thus forfeiting $756 million.
In February, Nigeria had a daily average production of 1.258 million barrels per day, instead of 1.8 million barrels, amounting to 35.22 million barrels for the whole month. Since the average price of crude oil per barrel was $97.13, the revenue earned from crude oil sale was $3.42 billion instead of $4.89 billion.
The shortfall for the month was $1.74 billion. The total crude oil production for the month of March was 38.39 million barrels based on the daily production of 1.238 million barrels, instead of the allocated 1.71718 million barrels.
As a result, the country earned a revenue of $4.5 billion instead of $6.24 billion since the average price of crude oil was $117.25 per barrel. Consequently, the country had a shortfall of $1.74 billion.
In April, Nigeria had a daily crude oil production of 1.219 million barrels and total production of 36.57 million barrels as against the daily figure of 1.735 million barrels and monthly figure of 52.05 million barrels allocated to it by OPEC. The average crude oil price for that month was $104.58.
Consequently, the country earned $3.82 billion revenue from crude oil sales instead of $5.44 billion.
For May, Nigeria’s daily crude oil production was 1.024 million barrels, while the total production for the month was 31.74 million barrels, although the country should have had a daily production figure of 1.753 million barrels and a monthly figure of 53.34 million barrels.
With the crude oil price at $113.34 per barrel, the country earned $3.6 billion from crude oil sales instead of the $6.12 billion it would have earned had it been able to fill its OPEC quota.
In June, Nigeria had a daily crude oil production of 1.158 million barrels and a total of 34.74 million barrels, instead of 1.772 million and 53.15 million respectively.
With the average price of crude oil per barrel at $116.14, the country had a revenue of $4.03 billion from crude oil sales rather than the $6.17 billion it would have made if it had been able to meet its daily allocation.
So, for the six months under review, Nigeria had a total crude oil production of 220.06 million barrels instead of 314.41 million barrels allocated to it by OPEC.
Consequently, the country only earned a total of $23.124 billion instead of $33.37 billion and recorded a shortfall of $10.246 billion.
Commenting on why Nigeria failed to meet her OPEC quota, Minister of State for Petroleum Resources, Timipre Sylva, blamed it on oil theft and vandalism.
The minister said the inability of Nigeria to meet its daily quota deprived it of the chance of taking advantage of the opportunity provided by high crude oil price occasioned by the Russia-Ukraine hostilities.
He added that the rising cases of oil theft was one of the reasons International Oil Companies (IOCs) sold their stakes and exited the country.
He, however, said the country was doing everything to address the situation. Sylva said, “Our goal is to restore Nigeria as the leading crude oil producer in Africa. If we tackle security and technical issues, we should be able to ramp our production up to 2.6 million bpd, and in the long run, we can boost it to 3 million bpd.”