Nigeria’s oil earnings drop to $460m per month, loses $3.9b of crude to theft, 133tcf of gas unlocked
Former Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Joseph Dawha, who disclosed this at the Nigerian Annual International Conference and Exhibition of the Society of Petroleum Engineers (SPE) in Lagos yesterday, said the price decline has seriously impacted the national purse, thereby constraining it to meet certain financial obligations.
Dawha, who had his last assignment as the GMD of NNPC yesterday, said the revenue slide has further denied the government and NNPC of the ability to meet its Joint Venture (JV) cash call obligations to the tune of $4.8 billion.
According to him, “this (oil price) decline has impacted on the average sale of government equity crude. With an average joint venture cash call budget of about $600 million per month, the drop of earnings from government crude to an average of $460 million portends difficulties to meet the yearly funding of about $4.8 billion.”
He further noted that the development of shale oil in Nigeria’s largest market – the United States – is a major challenge and has forced Nigeria to look for alternative market in Asia. However, “despite these challenges, we are focusing on strategic re-alignment of our crude oil exports to a graphically and more direct user-transactions in sustainable markets.”
More so, crude theft and pipeline vandalism have impacted on production in the past four years (between 2010 and 2014) when output dropped from 2.4 million barrels per day (bpd) in 2010 to about 2.0 million bpd in 2014, he added.
Equally, “significant production interruption is now a regular feature in Nigeria’s production profile, as an average of 250,000bpd was being deferred. At the price of $100 per barrel, this amounts to a loss of about $9.1 billion yearly. Crude theft from January to April 2015 stood at 39.3 million barrels, amounting to a loss of about $3.9 billion at an average crude price of $97.9 per barrels.
Meanwhile, to address the present sub-optimal performance of domestic refineries, Dawha said that new rehabilitation strategy has been adopted. The Managing Director, Total Plc, Elisabeth Proust, noted that Nigeria has very tremendous gas reserve but only about 46 trillion cubic feet (tcf) of the reported 178tcf of discovered gas resources is presently developed or is being developed.