Oil Revenue Plunged by $51.39bn – NEITI

• Oil Revenue Plunged by $51.39bn – NEITI

The total financial flows from Nigeria’s oil and gas sector slumped to $17.05bn in 2016, a 31 per cent decline on the $24.79bn generated in 2015, and a 75 per cent plunge on the sector’s peak earnings of $68.44bn in 2011.

According to data from the latest report of the Nigeria Extractive Industries Transparency Initiative released in Abuja on Friday, the drop in oil earnings showed that Nigeria lost $51.39bn within the period under review.

In addition, the 2016 figure was the lowest in 10 years and the fifth lowest in the 18 years covered by NEITI’s audit reports so far (1999 to 2016).

NEITI 2016 Oil and Gas Industry Audit Report showed that the plunge in revenue in 2016 resulted from the double whammy of low oil prices in the global market and reduced oil production in Nigeria, which in turn was caused by disruption and vandalism of oil assets and a spike in crude theft, among others.

The yearly average price of crude oil per barrel was $43.73 in 2016 as against $52.5 in 2015. The total oil production in 2016 was 659 million barrels as against 776 million barrels produced in 2015, a fall of 15 per cent.

The losses due to crude oil theft and sabotage rose from 27 million barrels in 2015 to 101 million barrels in 2016, an increase of 274 per cent. This was aside from the losses due to deferment, which in 2016 was put at 144 million barrels, which also went up by 65 per cent when compared to the 87.5 million barrels in 2015.

The report stated, “The bombing of the under-water 48-inch Forcados Oil Loading/Export Pipeline was one of many major occurrences that befell the industry in the year under review.

“This incident occurred in February 2016 and the line remained non-operational for seven months. Shell Petroleum Development Company declared force majeure on lifting from Forcados on February 21, 2016. Companies injecting into the Forcados Terminal such as Seplat, Panocean, Midwestern, Energia, Platform, Pillar, Waltersmith, and Excel shut down production for over 147 days.”

In addition, SPDC declared force majeure on the Bonny Terminal due to a leak in Nembe Creek Pipeline between May and July 2016 while Nigeria Agip Oil Company declared force majeure on the Brass Terminal between July and August 2016.

Similarly, Mobil Producing Nigeria Unlimited declared force majeure twice between May/June and July/October 2016. This was due to a drilling process disruption and damage to the Qua Iboe Terminal loading system.

The NEITI report stated that “MPN’s total production within the four-month period was 4,616,825 barrels, which is less than half of what was produced in each month previously as reflected in the Department of Petroleum Resources reconciled signoff records.”

The report further noted that the contribution of the oil and gas sector to Gross Domestic Product dropped from 9.5 per cent in 2015 to 8.3 per cent in 2016.

It said total gas produced in 2016 was 3,051,249 million standard cubic feet, out of which 288,209 mmscf was flared, representing 9.45 per cent of production.