The implementation of the 2023 budget, which totals N21.8 trillion, may be threatened following a shortfall 470,000 barrels per day (bpd) in Nigeria’s crude oil output last month.
At the current global market price of $92 per barrel, the 470,000 bpd shortfall, which represents 29 per cent drop from the budget benchmark of 1.69 bpd, amounts to a loss of $43.2 million daily or N32 billion at the Central Bank of Nigeria’s exchange rate of N742.10/$. The budget was pegged on 1.69 million bpd and $75 per barrel and, at the exchange rate of N437.57/$, the government expects to generate N2.29 trillion from the oil sector in 2023.
But in its September Monthly Oil Market Report (MOMR) obtained by Vanguard on Tuesday, the Organisation of Petroleum Exporting Countries (OPEC) stated that Nigeria produced 1.2 million bpd, excluding condensate, with output of 233,531 bpd meaning that the nation did not meet its production quota of 1.8m bpd during the period.
Nigeria’s inability to meet either the budget benchmark or OPEC quota is largely attributed to crude oil theft.
This is even as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) put the nation’s condensate output at 233,531 bpd (blended and unblended) during the period, indicating that Nigeria did not meet its set target.
Reacting to the development, the National President of the Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi said: “The current high crude oil prices currently standing at $92 per barrel could have reduced the negative impact of low output on the nation.
“But the nation is currently subsidising fuel import directly or indirectly as the prices of refined petroleum products have risen significantly in the global market”.
The Country Chair of Shell Companies in Nigeria, Osagie Osunbor, who confirmed the severity of oil theft in the company’s briefing, said: “We faced our biggest operational challenge in many years at SPDC (Shell Petroleum Development Company), where a significant decline in crude receipts at the Bonny Oil and Gas Terminal resulted in our declaration of force majeure in March 2022.
Source: Vanguard
