According to findings reported by Sunday PUNCH, Nigeria has experienced a consistent decline in monthly oil production since January 2024, resulting in a revenue shortfall of approximately N636.3 billion.
Data from a Federal Government agency reveals that Nigeria’s crude oil output, excluding condensates, stood at 1.43 million barrels per day (mbpd) in January, plummeting to 1.25 mbpd by May. Figures from the Nigerian Upstream Petroleum Regulatory Commission indicate that crude production totalled 44.22 million barrels in January and dropped to 38.8 million barrels in May.
Based on NUPRC figures, this translates to a decrease of 5.43 million barrels in crude oil production between January and May this year.
In January, the average price of Brent crude, the global benchmark, stood at $80.12 per barrel. By May, it had slightly increased to $81.75, as reported by Statistica, an international statistical firm.
During May this year, the average exchange rate of the naira against the United States dollar was N1,434.1/$. The naira has faced persistent depreciation against the dollar since January.
Calculating the impact of these factors alongside a 5.43 million barrels decline in crude oil production, Nigeria’s estimated revenue loss from January to May amounted to approximately N636.3 billion.
Meanwhile, there has been a noticeable decline in Nigeria’s crude oil production, starting from 1.43mbpd in January, dropping to 1.32mbpd in February, further declining to 1.23mbpd in March, showing a slight increase to 1.28mbpd in April, and then falling again to 1.25mbpd in May.
This drop in oil production is largely attributed to the persistent vandalism of pipelines and theft of crude oil. Efforts have been ongoing to curb these activities, although they have not yielded the desired results so far.
On June 13, 2024, the Nigerian National Petroleum Company Limited called on the judiciary to establish a specialized court for prosecuting perpetrators involved in oil theft and pipeline vandalism. Mele Kyari, NNPC’s Group Chief Executive Officer, made this appeal during the National Judges Capacity Building Workshop on the Petroleum Industry Act 2021, organized by the National Judicial Institute and INVESTIN 234 in Abuja. According to NNPC spokesperson Olufemi Soneye, Kyari also urged the judiciary to expedite hearings on cases related to these offences.
The NNPC leader also appealed for judicial assistance in addressing the dual issues of crude oil theft and pipeline vandalism to fully unleash the oil and gas sector’s potential to drive national economic and industrial advancement.
