Nigeria’s oil production fell to a six-year low of 1.49 million barrels per day (mbpd) in the first quarter of 2022, as record levels of crude theft and sabotage took its toll on the sector.
Output in the first quarter (Q1) of 2022 was lower than the daily average production of 1.72 mbpd recorded in the same quarter of 2021, and lower than the fourth quarter 2021 production volume of 1.50 mbpd.
Real growth of the oil sector was – 26.04% (year-on-year) in Q1 2022 indicating a decrease of 23.83% points relative to the rate recorded in the corresponding quarter of 2021.
The oil sector contributed 6.63% to the total real GDP in Q1 2022, down from the figures recorded in the corresponding period of 2021.
The oil thefts combined with export terminal and pipeline shut-downs are limiting Nigeria’s ability to ramp-up production and take advantage of high oil prices to grow dollar reserves.
Nigeria’s gross external reserves declined moderately to $38.36 billion as at May 19th,
2022 from $39.28 billion at end-March 2022. This was attributed by the Central Bank of Nigeria to the weak accretion to the reserves from exports and the high cost of importation of refined petroleum products.
OPEC member Saudi Arabia is a main beneficiaries of high crude prices, with its oil revenue in the first quarter of 2022 soaring to $49bn, up 58 per cent compared with the same period in 2021.
That enabled the Saudi government to post a budget surplus of $15.3bn in the first three months of the year as Russia’s war in Ukraine pushed oil prices over $100 a barrel to their highest levels in a decade.
Nigeria’s OPEC+ quota was raised to 1.72 million barrels per day (b/d) in March 2022.
Crude supply in 2021 was only 1.31 million b/d, meaning Nigeria is unlikely to help the global supply crunch, and unable to grow its Central Bank of Nigeria (CBN) dollar reserves due to the crude theft.
NNPC reports that crude thefts in 2021 reached 200,000 barrels per day or a quarter of onshore production.
Prolonged shut-downs at Forcados and Qua Iboe export terminals have also hampered output. So far in 2022 there have been little improvement, with Brass and Bonny terminals shut-in in March.
The stolen volumes cost Nigeria up to $3.27 billion, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reports.