OGR July - August Edition 2020

INDUSTRY NEWS
Nigeria’s Crudeoil Production Dropped by 294,000 bpd in
June – OPEC
revenues and lower global crude oil prices.
Moreover, despite Nigeria’s debt-to-GDP
ratio, which is moderate by international
standards at about 20 percent, the federal
government’s debt service-to-revenue ratio is
already high due to low tax revenue. As a
result, debt servicing might limit the
government’s ability to increase economic
productivity, and the fiscal account may
remain in deficit throughout the medium
term.”
In another report, Nigeria stands in the fifth
position in revenue from oil export among
OPEC member countries as she earned
$45.11billion from oil last year.
The report shows that Nigeria's revenue was
valued at $206.06billion came from
petroleum export from 2015 to 2019.
The Organisation of Petroleum
Exporting Countries (OPEC) has
said in its July edition of Oil
Market Report that Nigeria’s crude oil
production dropped by 294,000 barrels
per day (bpd) in June.
According to the report, the country’s
crude oil production stood at 1,411,000
bpd in June as against 1,705,000 bpd in
April and 1,436,000 in May, which
resulted in a change of -25 in June and
May.
In the month under review, the largest
crude oil cartel in the world also said that
secondary sources revealed that
Nigeria’s crude oil production stood at
1,504,000 bpd in June as against 1,777,
000bpd in April and 1,592,000 in May,
which resulted in a change of -88 in June
and May.
This shows a shortfall of about 280,000
bpd of the country’s crude oil production
benchmark of 1,700,000 mbpd, which is
a downward review of the earlier 2.01
mbpd for its 2020 budget.
It would be recalled that in April, OPEC
and its allies led by Russia, agreed to cut
crude oil production by 9.7 mbpd. The
production cuts which took effect in
May, saw many countries not complying
with the production adjustment cuts,
including Nigeria. So on June 18 after a
Joint Ministerial Monitoring Committee
(JMMC) meeting, countries that did not
comply in May and June were asked to
submit their plan of ensuring compliance,
which took effect in July.
On the Gross Domestic Product (GDP)
and the debt profile of the country and
the impact
occasioned by COVID-19 pandemic in the
country’s economy, OPEC said, “Nigeria’s
GDP grew by 1.9 percent y-o-y in 1Q20
following 2.6 percent growth in 4Q19,
marking the slowest pace of economic growth
since 3Q18. The data most probably reflects
early COVID-19 disruptions, which led to
restrictions in Nigeria’s activities with its main
trading partners. The non-oil sector grew by
only 1.5 percent compared with 2.3 percent in
4Q19. Meanwhile, internal trade declined to -
2.8 percent following a contraction of only -
0.5 percent in 4Q19. Public administration
contracted by -8.7% in 1Q20, while
administrative and support services
contracted by -1.9 percent following
expansion of 1.3 percent in 4Q19. Nigeria’s
manufacturing sector expanded only by 0.4
percent compared with 1.3 percent in 4Q19,
and agriculture grew by 2.2% following
growth of 2.3 percent in 4Q19. Most
importantly, the oil sector advanced by only
5.1 percent following 6.4 percent growth in
2019.
It further stated,”The recent manufacturing
PMI reading indicated the steepest
contraction in Nigeria’s manufacturing
activity since July 2014, as it fell to 41.1 in
June from 42.4 the previous month. In the
meantime, responding to the recent crash in
oil prices and the economic fallout of COVID-
19, Nigeria’s central bank devalued the local
currency as it adjusted the official peg against
the dollar to 360 from 307 in March. The step
was taken to converge a multiple exchange
rate regime which it has used to manage
pressure on the naira. Meanwhile, according
to a Debt Management Office statement
published on 2 July, Nigeria’s public debt
increased by around 15 percent y-o-y by the
end of March to US$79.3bn, driven by growth
in both domestic and foreign borrowing due
to a shortage caused by a decline in internal
According to the breakdown from OPEC’s
2020 Annual Statistical Bulletin Nigeria’s oil
export revenue fell in 2016 to $27.29billion
from $41.17billion in 2015, tipping Nigeria
into recession.
Oil revenue later improved in 2017 to $37.98
billion and by the time Nigeria’s economy
came out of recession in 2018, the revenue
jumped to $54.51billion.
The four bigger earners ahead of Nigeria are
Saudi Arabia ($202.37billion), Iraq
($80.03billion), Kuwait ($52.43billin) and the
United Arab Emirates ($49.64billion).
The country also imported $265 billion worth
of petroleum products.
Nigeria exports its crude oil to Europe, North
America, Asia and Pacific, Latin America,
Africa and Middle-East.
Last year, its export to Europe plunged to
680,600 barrels per day from 1.06 million bpd
in 2018. Also export to North America fell to
27,500 bpd from 172,000 bpd
However, export to Asia and the Pacific rose
from 387.200bpd in 2018 to 664.900bpd in
2019. Also, Nigerian oil export to Latin
America increased from 52.300 bpd in 2018
to 252.200 bpd last year.
Exports to Africa fell from 309.500 in 2018 to
260.700 in 2019. No export was recorded for
Middle East in 2018 but 122.300bpd was
exported in 2019.
The total volume of oil exported to North
America slumped by 84 per cent to 27,500
bpd in 2019, while exports to Africa fell by
15.77 per cent to 260,70
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OIL AND GAS REPUBLIC I SPECIAL EDITION