The country has been struggling with revenue shortfall for some time due to oil theft in the Niger Delta. The recent threats by a Niger Delta militant group, Creek Reform Warriors, to vandalize major oil platforms in the region would worsen the country’s cash crunch. Nigeria earns about 80 percent of its revenue from crude oil exports.
From January to May, the net oil export revenue of the country experienced a significant decline of 66 percent, falling to $11bn, against the $34bn earned during the same period last year, according to data obtained from the Organisation of Petroleum Exporting Countries Revenue Factsheet released by the U.S. Energy Information Administration.
It earned about $46b from oil in 2022, according to the National Bureau of Statistics.
Its oil output fluctuated between 985,000 barrels per day in the third quarter of last year and 1.2b million b/d in Q4. It dipped further to 999,000 barrels in April before picking up again in May to 1.1mb/d.
In contrast, Saudi Arabia and the United Arab Emirates have plans in place to significantly boost their production capacity to 13 million bpd and 5 million bpd, respectively, by 2027. Both countries currently produce about 12 million/bpd and 4 million/bpd.
Fellow Gulf producer Kuwait on June 18 also said it would boost its production capacity by 200,000 bpd by 2025 to reach 3 million bpd.
Capacity additions from the three Gulf countries over the 2020-2025 period total a combined 1.2 million bpd, double the capacity that Nigeria and Angola are projected to lose over the same period, according to a Reuters calculation.
A similar report by the agency had said that the country’s combined production quota of Angola in the ongoing OPEC cuts dropped by over 3 percent to below 9 percent in May.
The country’s OPEC quota had dropped from 1.8mb/d to 1.3mb/d in May as its capacity continues to be restricted by operational and security issues, combined with low investment levels, leading to a decline.
In May, while Saudi Arabia, the UAE and Kuwait’s shares of total OPEC production were over 10 percent higher than it was 15 years ago at 55 percent, Nigeria and Angola’s total shares over the same period shrank by over three percent to below nine percent.
Unlike Gulf producers, African producers rely heavily on investment from international oil companies. Those companies have shunned Africa in recent years in favour of investment in the US shale patch and in prolific giant oilfields elsewhere such as offshore Brazil and Guyana.
The EIA in one of its reports said Nigeria was no longer Africa’s highest crude oil producer due to disruptions, which were threatening its production outputs.
“For many years, more crude oil was produced in Nigeria than in any other country in Africa. However, unplanned production outages—or disruptions—in Nigeria have, at times, resulted in its crude oil production falling below that of Angola, the second-highest-producing country in Africa. Disruptions remain a significant and persistent downside risk to Nigeria’s crude oil production,” the report said.
The EIA, however, projected that Nigeria’s earnings would increase to about $29b in the same period (January-May) in 2024.
The report revealed that Angola, which was the closest continental rival to Nigeria in oil export, made about $12b within the period, while Saudi Arabia, the highest oil producer in OPEC realized $97bn.
Meanwhile, the entire OPEC members earned about $888bn in net oil export revenue in 2022. The revenue rose nearly 43 percent compared with the previous year, according to the EIA.
“The increase in net export revenue in 2022 is mostly attributable to higher crude oil prices and to a lesser degree to higher petroleum liquids production,” the EIA said in the fact sheet.
OPEC’s total oil output rose to nearly 34.2 million barrels per day in 2022 and increased by 2.5 million barrels per day year-on-year, according to the report.
“We expect OPEC total oil liquids production to decrease to 33.5 million barrels per day in 2023, while the forecast Brent spot price will fall from $101 per barrel in 2022 to $80 per barrel,” it added.
The organization projected that OPEC’s net oil export revenue would go on to increase in 2024.