In recent times, some incoherent and discordant tunes have been coming out from government quarters for Nigerians to dance to. One of such many tunes is the oil theft and oil production figure. While the Minister of Finance and Coordinating Minister of the Economy wants us to believe that oil production is down, so much as to affect the 2013 budget to the point that government may not be able to function properly, her counterpart in the Ministry of Petroleum Resources is saying though there is crude oil theft going on, production has not fallen far below the budget target of 2.52 million barrel per day though it could be better.
The National Bureau of Statistics and the Central Bank have both confirmed the position of the Minister of Petroleum Resources. The Minister of Finance had said that crude oil production drops to around a disturbing 1.3 million barrels per day. In addition she said the economy has suffered great loss due to the activities of oil thieves and pipeline vandals, and all these have led oil production to fall to between 2.1 and 2.2mbpd as against the 2013 budget projection of 2.5mbpd. She had told ministers that the Nigerian National Petroleum Corporation, NNPC, had on April 18 reported a drop in crude oil production in the first quarter of 2013, January to March, which cost Nigeria a loss of crude oil revenue to the tune of $1.23 billion (N190 billion). That loss is now set to continue and the country might not be able to meet its obligation to its customers. But available data from the CBN and National Bureau of Statistics contradict the gloomy picture painted by the Minister of Finance.
National Bureau of Statistics NBS, 2013 first quarter reports said; “The oil sector recorded an average daily production of 2.29 million barrels per day in the first quarter of 2013 based on data obtained from the Nigerian National Petroleum Corporation (NNPC) as against 2.35 million barrels per day in the corresponding quarter in 2012. These figures, with their associated gas components, resulted in a growth rate, in real term of -0.54 per cent in oil GDP in the first quarter of 2013 compared with the –2.32 per cent for the corresponding period in 2012. However, the sector also benefited immensely from the relative stability in international crude oil market price and the exchange rate of naira against the dollar.
The CBN in its report on oil production in the first quarter of 2013 said that in January, 2.39 mbp was produced while 1.94 mbp was exported at an average price of $115.24 per barrel. It said that in February, 2.23mbd was produced, 1.78 mpd exported at $118 per barrel. In the month of March, while 2.2mbp was produced, 1.79mpd was exported at the average price of $112.79 per barrel. NNPC in its own report said that data on non-fiscalised production from several companies was not available.
Consequently, the total figure of 48.15 million barrels of non-fiscalised production is short of actual. It said that fiscalised production total for the month of January was 75.51 million barrels representing 2.36 million barrels per day, and 10.44 per cent higher than the December 2012 production of 68.37 million barrels or 2.21 million barrels per day. Total crude oil and condensates lifting for both domestic and export was about 73.89 million barrels. Oil companies lifted about 36.02 million barrels (49%), while NNPC lifted 37.86 million barrels (51%). Lifting by fiscal regime shows 42.08, 25.83, and 5.99 million barrels for JVC, PSC/SC, and others respectively. Out of NNPC’s liftings, 27.59 million barrels were for Federation Account, while 10.27 million barrels were for domestic use. In the month of February, fiscalised production total for the month was 62.53 million barrels representing 2.23 million barrels per day, and10.52% lower than the January 2012 production of 69.11 million barrels or 2.23 million barrels per day. Total crude oil and condensates lifting for both domestic and export was about 57.42 million barrels. Oil companies lifted about 35.86 million barrels (62%), while NNPC lifted 21.56 million barrels (38%). Lifting by fiscal regime shows 26.48, 24.24, and 6.70 million barrels for JVC, PSC/SC, and others respectively. Out of NNPC’s liftings, 16.19 million barrels were for Federation Account, while 5.37 million barrels were for domestic use.
The truth that the government is not telling the Nigerian public is that it has no control over oil production and export. Yes, oil production is less than the budgeted target of 2.52 million barrels per day in government’s calculation, but production has not fallen below the two million mark. The drop in production is rather marginal not to the point of scaring all of us. The Federal Government is economical with the truth. The government is funding the joint venture cash calls and contract sharing project with multinational with crude. The crude that should have been sold is given out to multinationals. This outlet is what gives room for both top government officials, NNPC, multinational companies to steal Nigeria’s crude.
If this is not the case, how can a ship load of crude oil leave Nigerian waters without the law enforcement agencies knowing? Vessels that carry crude are not submarine or are they the usual ghosts that take salaries in ministries, agencies and departments of government. They are large vessels that even the blind will see. Very soon, government officials will come out with the usual joke, ghost ships and vessels are stealing Nigeria’s crude oil. It was instructive when NNPC said recently that on completion of the Nebe pipeline, daily average crude oil production is expected to increase to 2.50 m/bpd which will exceed the national daily target of 2.48 m/bpd. Our expectation is to increase production from the 2.48 to 2.55 m/bpd (both crude and condensate) for the rest of the year. We have the capacity and potential to maintain production above 2.55 m/bpd in the country. Mr. President, let’s get serious with our economy and source of revenue. Crude oil falling below budget target is no excuse for non-performance.
