The Nigerian Extractive Industries Transparency Initiative (NEITI) has disclosed that the total financial flows from Nigeria’s oil and gas sector depreciated to $17.05 billion in 2016, a 31 percent decline on the $24.79 billion generated in 2015, and a 75 percent plunge on the sector’s peak earnings of $68.44 billion in 2011.
This decline in oil earnings showed that Nigeria lost $51.39 billion within the period under review, with the 2016 figure the lowest in 10 years and the fifth lowest in the 18 years covered by NEITI’s audit reports so far (1999 to 2016).
The latest report revealed that the plunge in revenue in 2016 resulted from the double incidence of low oil prices in the global market and reduced oil production in Nigeria, which was caused by disruption and vandalism of oil assets and a spike in crude theft, among others.
The yearly average price of crude oil per barrel was $43.73 in 2016 as against $52.5 in 2015, while the total oil production in 2016 was 659 million barrels as against 776 million barrels produced in 2015, a fall of 15 percent.
According to the report, the losses due to crude oil theft and sabotage rose from 27 million barrels in 2015 to 101 million barrels in 2016, an increase of 274 percent.
This was aside from the losses due to deferment, which in 2016 was put at 144 million barrels, which also went up by 65 percent when compared to the 87.5 million barrels in 2015.
“The bombing of the under-water 48-inch Forcados Oil Loading/Export Pipeline was one of many major occurrences that befell the industry in the year under review.
“This incident occurred in February 2016 and the line remained non-operational for seven months. Shell Petroleum Development Company declared force majeure on lifting from Forcados on February 21, 2016.
“Companies injecting into the Forcados Terminal such as Seplat, Panocean, Midwestern, Energia, Platform, Pillar, Waltersmith, and Excel shut down production for over 147 days,” the report said.
Besides, SPDC declared force majeure on the Bonny Terminal due to a leak in Nembe Creek Pipeline between May and July 2016 while Nigeria Agip Oil Company declared force majeure on the Brass Terminal between July and August 2016.
The Mobil Producing Nigeria Unlimited declared force majeure twice between May/June and July/October 2016. This was due to a drilling process disruption and damage to the Qua Iboe Terminal loading system. “MPN’s total production within the four-month period was 4,616,825 barrels, which is less than half of what was produced in each month previously as reflected in the Department of Petroleum Resources reconciled signoff records,” the report added.
Adedapo Adesanya