Nigeria’s oil revenue plunge may have taken a turn for the worst as it recorded highest drop in its crude oil production quota in the Organisation of Petroleum Exporting Countries (OPEC) last March. According to the latest monthly report released by OPEC on Thursday, Nigeria’s crude oil output contribution for the 12 member country cartel for the month of March averaged 1.67 million barrels per day, down from 1.80 million bpd it produced in February.
The 1.67 million barrels per day supplied by Nigeria in March was about 29 million short of the 1.96 million bpd the country pumped in January; and further deepens the country’s oil revenue shortfalls that has bedeviled Africa’s largest economy in the wake of the oil price plunge.
Besides Nigeria, four other OPEC members- Algeria, Angola, United Arab Emirates and Venezuela recorded declines in production, while the rest (excluding Kuwait whose production remained unchanged), led by Saudi Arabia scaled up its production output to cover up the margin. Crude oil production from Algeria, Angola, UAE and Venezuela fell to 1.12 million bpd (from 1.13 million in February), 1.75 million (from 1.79 million), 2.91 million (from 2.98 million) and 2.73 million (from 2.74 million), respectively, based on direct communication.
Nigeria, Africa’s top oil producer, also saw the second-largest drop in rig count after Venezuela in March, data from Baker Hughes Incorporated and OPEC’s estimates showed. Rig count, which is largely a reflection of the level of exploration, development and production activities occurring in the oil and gas sector, dropped to 32 in Nigeria last month from 36 in February and 38 in January. The number of rigs in the country has continued to witness decline since the fall in global oil prices, which had taken a huge toll on companies’ capital expenditures on exploration and production.
Nigeria has the second largest amount of proven crude oil reserves in Africa, but reserve estimates have been stagnant as exploration activities have been low, the United States Energy Information Administration noted in its ‘Nigeria Brief’. The USEIA further acknowledged that rising security problems coupled with regulatory uncertainty had contributed to decrease in exploration activities in Nigeria.
With Agency Report:
By Olisemeka Obeche