Explainer: How Low Is Nigeria’s Crude Exports In 2022?

Nigeria is currently facing a crude theft crisis, leading to one of the worst production turnout in recent years.

According to regulators, the country’s pipelines have faced large-scale  theft of crude that is forcing many oil companies to shut down production, further crippling the country’s fiscal stability.

Data obtained from OPEC showed that Nigeria’s production fell in the first seven months of the year to about 1.1 million barrels a day of crude equivalent in July from over 1.4 million barrels in January.

Now recent data from the Nigerian Upstream Petroleum Regulatory Commission showed that in August, the country’s total output dropped to an annual low of 1.18 million bpd, the lowest it has gone since at least 1997.

Additional data from the Organization of the Petroleum Exporting Countries (OPEC) shared figures that proved that the output never fell below 1.4 million bpd, even amid what were considered at the time to be “crippling militant attacks” in the Niger Delta during 2009-10 and again in 2016.

Data Analysis On Crude Theft In Nigeria

In the first seven months of 2022, Nigeria lost an estimated average of 437,000 barrels of oil a day to oil theft in pipelines onshore and offshore in the Niger Delta region. The amount lost was estimated at $10 billion, which is equivalent to N700 trillion ( current dollar rate to naira).

Breaking down production losses within these months, one finds that in January alone, Nigeria  produced 1.41 million barrels per day compared to the average OPEC quota of 1.68 million barrels per day for January. This amounts to a shortfall of about 270,000 barrels per day. With the price of crude at $85.24 in January, this shortfall meant Nigeria lost a staggering $23 million daily.

In February, production stood at 1.37 million barrels per day against the OPEC quota of 1.7 million barrels per day. The shortfall for that period was 328,000 barrels per day, which resulted in a loss of $30.81 million daily (at $93.95 OPEC basket price).

By March, the price of crude had jumped to $113 per barrel and OPEC had increased Nigeria’s quota to 1.71 million barrels per day. However, Nigeria’s production dropped to 1.34 million barrels, a daily shortfall of 378,000. Nigeria potentially lost $42.8 million worth of revenue daily.

In April, oil prices dropped to $105 but OPEC still increased Nigeria’s required production to 1.73 million barrels per day. Unfortunately, Nigeria was only able to turn a daily output of 1.32 million barrels.

May witnessed many companies fold up due to constant attacks by vandals, leading Nigeria’s output to further drop to 1.23 million barrels per day compared to the average OPEC quota of 1.75 million. This amounts to a shortfall of 520,000 barrels per day. It also translates to a loss of $59 million in daily revenue since the oil price increased to $113 per barrel in May.

As it stands Nigeria is losing up to 95 per cent of oil output to criminals at pipelines in oil hubs like Bonny island. The country can only secure 3,000 barrels out of 239,000 barrels injected into the pipeline from Bonny Terminal, the NNPCL Boss, Mele Kyari said.

This rate of theft has forced the NNPCL and their Joint Venture (JV) partners to shut down two production fields, with the possibility of shutting down more if nothing is done to contain the attacks.

Patsy Nwogu

Reporting on data-driven featured stories and investigations.

Related post