AGAINST the positive picture painted on possible rise in the price of
crude oil at the international market above USD50 per barrel, Nigeria
may be left out of reaping this fortune as the United States Energy
Information Administration, EIA, projected a negative downturn for the
country’s crude oil production growth this year. The report is coming as
a data from the Nigerian National Petroleum Corporation, NNPC,
indicated a steady decline in output since January with the Minister of
State for Petroleum Resources, Dr. Ibe Kachikwu, buttressing the gloomy
picture of Nigeria amidst the international price recovery.
Nigeria’s crude oil production in the five months to May 2016 dropped
to 295.09 million barrels, showing a shortfall of 36.15 million barrels
or 10.91 per cent from 331.24 million barrels recorded in the preceding
five months of August-December, 2015. The January-May 2016 output
translated to an average daily crude oil output of 1.97 million barrels
per day (mbpd), according to data released by the Nigerian National
Petroleum Corporation, NNPC.
The output level reflected the impact of production shut-ins
following increased militancy siege on oil installations. However, with
interim reports showing further declines in output in the months of June
to date, subsequent data from NNPC would reflect a further drop in
cumulative production level, which would also mean increased cost of
militancy to the government. United States’ Energy Information
Administration (EIA) had put the average crude oil price for the first
five months of 2016 at USD37.882 per barrel, compared to an average of
USD44.97 per barrel in the last five months of 2015. This meant that
Nigeria earned about USD11.18 billion in the first five months of 2016,
an equivalent of N2.2 trillion, using the official exchange rate of N197
to a dollar as at that period. Month-on-month analysis of the country’s
crude oil output showed a steady decline since January this year.
January 2016 output was 66.49 million barrels which translated to an
average of 2.22 million barrels per day, while in February, 59.27
million barrels was produced, giving an average of 1.98 million barrels
per day.
In March, April and May 2016, 57.43 million, 59.56 million and 52.34
million barrels were produced, translating to a daily average of 1.91
million, 1.99 million and 1.74 million barrels respectively. EIA data
indicates that Nigerian oil production would remain depressed through
2017 as a result of militant attacks. The data also indicated that
despite the discordant tone over possible agreement on production cut
back by OPEC members as they meet next month, oil prices would rebound
beyond USD50 per barrel in the weeks ahead.
Source:Busssiness News
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