Nigeria’s Crude Oil Revenue Takes a Hit as Production Slips

Nigeria’s crude oil revenue suffered a setback in July, with the country losing approximately N249 billion due to a significant drop in oil output.

The latest oil production data, seen on Sunday, revealed that the nation’s oil production plummeted by over four million barrels in the month of July.

According to figures obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s total oil production in June stood at 37.5 million barrels.

However, this figure dwindled to 33.5 million barrels in July, indicating a loss of about four million barrels between the two months. The decline has been attributed to factors such as pipeline vandalism and crude oil theft, which have consistently plagued Nigeria’s oil industry.

During July 2023, the average cost of Brent crude oil, the global benchmark, stood at $80.1 per barrel as per data provided by the World Bank.

Considering the loss of four million barrels of crude oil during July, the revenue implication translates to approximately $320.4 million for the review month. With the average exchange rate for July set at N777.3 to $1, when multiplied by the revenue loss, the total loss amounts to about N249 billion.

Commenting on the development, the President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, had earlier told our correspondent that the drop in oil output posed a dangerous sign.

“That is a very dangerous signal of trouble that is coming. This is because we thought that with what the Tompolo team is doing, we should be approaching about two million barrels of crude oil production per day.

“So if the volume of reduction per day is this frightening, then it is something that calls for urgent investigation. If we have dropped from over 1.3 million barrels per day to about 900,000 barrels per day, that is already about 400,000 barrels that are lost daily and it is a very negative and bad trend for Nigeria.

“It portends economic downturn that could be drastic if the situation continues. However, I believe that with all of these new oil discoveries in Nasarawa and Bauchi, and production commencing, there may be a positive change,” Gillis-Harry stated.