Nigeria’s revenue crisis worsens as oil output plunges to record low



By Ori Martins

If statistics revealed about the current level of Nigeria’s oil export is anything to go by, then there is every reason for the Federal Government to worry. It means that national revenue generation emanating from the oil sector will drastically dwindle as oil exports, according to industry experts, hit all time low.

Last week, signals from the oil sector indices confirmed that crude oil exports out of Nigeria had plunged to as low as below one million barrels per day (bpd). This, as explained by Petro-Logistics, was the lowest ever since 2007. Petro-Logistics equally stated that in about three years,

“Nigeria’s crude oil exportation has essentially halved” to about 900000 body.
Informed industry commentators are of the opinion that the continued under par investments in the oil sector and the long standing factor of oil theft, particularly the evil of pipelines attacks have effectively combined to bring about an acute affliction on the sector.
According to analysts, who are not willing for public identification, a lead factor in the current quagmire is premised on the fact that indigenous big oil players are not really investing in the local supply even as their international counterparts are said to have lent away facilities in terms of assets or actually divesting.

A report monitored from the Nigerian Upstream Petroleum Regulatory Commission, noted that it was the lowest slide since 1990. The fact check showed that both crude oil and condensate production slumped to a deplorable levi of 1.18 million bpd in August, which was rated as the lowest so far in the 2022 calendar.

An August report gleamed from Monthly Oil Market Report (MOMR) indicated that Nigerian oil production in July was pegged at 1.183 million bpd. That of June was 1.176 million bpd. These figures confirm that Nigeria has been underperforming. It is revealed that Nigeria is the most underperforming among the OPEC+ members held together by the production pact.

For instance, in July, Nigeria’s crude oil production projection was 1.799 million bpd. The implication is that the country lagged behind with about 600,000 bpd below its target.

As other crude oil producers worldwide are gaining from high oil prices, Nigeria is yet to maximize its potentialities as it has been estimated that oil revenues are 61% below target within this quarter. This is what industry experts regard as worrisome because crude oil is trading at a very high price as a result of the Russia-Ukraine war.

Rather that consolidate and leverage on the boom, what is more pronounced is the cankerworm called oil theft, pipeline vandalism as well as high gasoline prices, and huge subsidy, and fuel import.

According to Mr. Sunday Nwachikamma, a downstream operator in Owerri, Nigeria’s oil problem is theft and corruption.

“I was shocked when I learnt that Nigeria’s oil exports had gone to all time low. It is sad. I have experience in this oil sector and I can tell you stories.

“We cannot go far until we fight oil theft which Peter Obi has described as organized crime. We must also do away with pipeline vandalism”.

“Without hiding anything, the Nigerian authorities confirmed that oil revenues had dropped by 80 percent. This, in the words of a sector’s expert, “is a huge challenge for the first Sub-Saharan economy highly reliant on the black gold”.

The Director General of Budget, Ben Akabueze said ‘‘Our forecast, oil revenues have decreased by more than 80%. We had to lower our budget to bring it down to a base of $20 per barrel’‘.
New strategies

However, Minister of Information and Culture, Lai Mohammed, has said that the government was determined to end crude oil theft soon. He said this would be made possible through “the deployment of technology and additional security measures”.

He pegged the approximate loss at about 700,000 barrels of oil daily. The minister, in a statement signed by the Special Assistant, (Media), Segun Adeyemi, said; “The investment in technology has become critical because the nefarious activities of vandals are causing Nigeria to lose approximately 700,000 barrels of oil daily”.


Mohammed revealed that the renewed efforts of the security agencies in fighting oil thefts led to the arrest of 210 suspects and confiscation of 20.2 million litres of AGO, 461.8 thousand litres of PMS, 843.6 thousand litres of DPK, and 383.5 thousand barrels of crude oil.

He added, “An additional 365 illegal refining sites were destroyed, with about 1,054 refining ovens, 1,210 metal storage tanks, 838 dugout pits, and 346 reservoirs destroyed by the GSAs. We witnessed first-hand a number of illegal refineries destroyed by our military in the course of our aerial surveillance.”

According to him,“The new security architecture leverages collaboration between the upstream operators, industry regulators, government security agencies, and private security contractors”.

In its bid to get rid of the oil thieves as a means of boosting bigger oil production as one of the ways of fighting the decline in oil prices, the federal government had engaged the services of private security contractors. They were recruited to provide local intelligence on all illegal crude activities going on within the oil rich Niger Delta.

Mohammed also revealed that the Nigerian National Petroleum Company (NNPC) Limited has set up a command-and-control centre for round-the-clock monitoring of petroleum operations and activities within the Nigerian exclusive economic zone (EEZ).

“In addition, all ship-to-ship activities within the Nigerian EEZ are also monitored,” Mohammed said.

“Vessels without permits are flagged and escalated to the Nigerian navy for a prompt response. Production is also monitored end-to-end at the command-and-control centre, from the wellhead to the export terminals”, he added.
He lauded the vision of the NNPC by doing much in deploying what he termed “appropriate technology with capabilities” for continuous surveillance.


Yet, there are many concerns that in spite the sincere efforts of the Federal Government to ensure that productions improve, there may not be much change.

“The fact remains that I thank the Federal Government for fighting crude theft. I can see its sincerity. However, let me also inform you that whatever efforts the government is making today cannot boost the crude sells. The crude sells will be determined based on the interplays in the international market.

“We must take into cognisance the fact that the war in Ukraine, which involves Russia, is a major factor on the price of oil, internationally. You are also aware that oil is no longer golden as it used to be some 20, 30 or even 40 years ago!

“Many countries in Europe; America, China and Japan are moving away from oil. I am afraid the plunge may not appreciate to our expectation again“, Emeka Ndidi, a major operator in the downstream sector in Owerri said.

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