Nigeria has suffered a revenue loss of approximately N636.3 billion from January to May 2024 due to a consistent decline in monthly oil production. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that crude oil production, excluding condensates, fell from 1.43 million barrels per day (mbpd) in January to 1.25 mbpd in May. This drop translated to a reduction from 44.22 million barrels in January to 38.8 million barrels in May, a decrease of 5.43 million barrels over the period.
The average price of Brent crude, the global benchmark, increased slightly from $80.12 per barrel in January to $81.75 per barrel in May, according to Statistica.
Additionally, the naira’s exchange rate against the US dollar worsened, averaging N1,434.1/$ in May. These factors combined with the production decline resulted in the significant revenue loss. Nigeria’s oil output fluctuated throughout the months, with production dipping to 1.32 mbpd in February, 1.23 mbpd in March, briefly rising to 1.28 mbpd in April, and falling again to 1.25 mbpd in May. This ongoing decline is largely attributed to persistent pipeline vandalism and crude oil theft.
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Meanwhile, The Punch reports that in response to these challenges, the Nigerian National Petroleum Company Limited (NNPC) has called for the establishment of a special court to expedite trials of individuals involved in crude oil theft and pipeline vandalism. NNPC’s Group Chief Executive Officer, Mele Kyari, made this plea during the National Judges Capacity Building Workshop on the Petroleum Industry Act 2021, organized by the National Judicial Institute and INVESTIN 234 in Abuja. Kyari emphasized the need for swift judicial action to deter offenders and bolster the enforcement of security measures.
Kyari highlighted that crude oil theft and pipeline vandalism significantly undermine the benefits of the Petroleum Industry Act (PIA) and impede the growth of Nigeria’s oil and gas sector. He called for accelerated hearings of related cases to support the various security arrangements implemented by NNPC, law enforcement agencies, and other stakeholders. Kyari stressed the critical role of the judiciary in ensuring the industry’s success and urged for timely adjudication and appropriate sanctions to deter future offenses. He reaffirmed NNPC’s commitment to collaborating with all relevant stakeholders to maximize the benefits of Nigeria’s natural resources for the country’s economic and social development.
Crude oil theft remains a significant obstacle, impacting both government revenue and international oil company earnings. NNPC’s call for judicial support aims to address these challenges and stabilize Nigeria’s oil production and revenue.
