Nigeria Loses N720 Billion Following Oil Production Decline

According to a recent report, Nigeria lost over N720 billion in revenue in February and March 2024 due to its crude oil production declining month after month.

It was also announced that Nigeria missed its crude oil production target in the 2024 budget due to its inability to increase production during these months.

Nigeria's 2024 budget provided a benchmark for crude oil production of 1.78 million barrels per day, comprising crude oil and condensate.

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But according to information obtained from the Organisation of Petroleum Exporting Countries' most recent April 2024 Monthly Oil Market Report, Nigeria's crude oil production (excluding condensates) saw its second consecutive monthly decline since the start of the year in March, falling to 1.231 million barrels per day.

According to OPEC, Nigeria produced less crude oil in March than it did in February, based on information it received directly from the country.

The data from the report stated that Nigeria produced 1.322 million barrels of crude oil per day in February of this year; however, in March, this fell to 1.231 million barrels per day, a 91,000 barrel decrease.

The report further stated that the country produced 1.427 mbpd of crude in January, but this was not sustained in February as it dropped, while southward oil production continued in March.

On Sunday, additional information was obtained from the Nigerian Upstream Petroleum Regulatory Commission in Abuja, indicating that the country's output of condensates and crude oil has not yet attained the target set in the 2024 budget.

According to data from the NUPRC, Nigeria produced 1.643 million barrels of crude oil and condensates in January, 1.539 million barrels in February, and 1.438 million barrels of condensates in March. According to reports, the budget benchmark for the production of condensates and crude oil in 2024 is 1.78 million barrels per day.

Concerning the N720bn Revenue Loss

According to OPEC data, Nigeria lost 105,000 barrels of crude oil per day in February, compared to January's daily production. This means that during the full 29 days of February 2024, 3,045,000 barrels will be produced.

In February 2024, the US dollar had an average exchange rate of N1,383.9, while the average price of Brent, the world's benchmark for crude oil, was $83.48 per barrel, according to data from Country Economy, an international website that publishes crude oil prices. 

In February, 3,045,000 barrels of crude were lost; based on the average monthly exchange rate, Nigeria lost $254.19 million, or N351.78 billion.

An additional examination of OPEC's data revealed that the nation lost 91,000 barrels daily in March, of which 2,821,000 were lost during the month under review.

In March of this year, the average price of Brent was $85.41/barrel, and the average exchange rate was N1,528.3/$ during the same month.

Nigeria's earnings from crude oil decreased by $240.94 million due to the country losing 2,821,000 barrels of crude oil last month. Based on the average exchange rate for March, this amounts to a N368.23 billion revenue loss.

As a result, 5,866,000 barrels of crude oil were lost over the two-month period. According to the previous analysis, this crude's value was N720 billion.