FGN; N133bn loss in Crude Production

In February, 2014, Nigeria’s crude oil production dropped by 7.44 million barrels causing a loss of about N132.611bn ($828.816mn) in one month.
The data from Central Bank of Nigeria, Economic Report for February 2014, reported that the country’s crude oil production, as well as condensates and natural gas liquids, was at an average of 1.86 million barrels per day (mbd) or 52.08 million barrels in February. This is in contrast to the production in January 2014 which was 1.92mbd or 59.52 million barrels for the month of January resulting to a decline of 3.1%.
The CBN report also stated that the price of Nigeria’s reference crude, the Bonny Light, rose by 1.1%, at an estimated average of US$111.40 per barrel above the level of the preceding month.
According to the report, the average prices of other competing crudes, namely the West Texas Intermediate at US$95.00 per barrel; the U.K Brent at US$109.77 per barrel; and the Forcados at US$112.26 per barrel also rose above the level of the preceding month.
The CBN report also disclosed that the month under review also recorded deliveries for domestic consumption at 0.45mbd or 12.6million barrels.
Crude oil export for the month of February was at 39.48 million barrels which is an average of 1.41 million barrels per day, compared to an average of 1.47 million barrels per day in January. This also caused a loss of about $678.426mn in the nation.
Some analyst disclosed that inflows into Nigeria’s foreign exchange reserves may be weakened by the negative impact on crude export as a result of major disruptions along the Bonny and Forcados pipeline.
They added that ‘’Oil prices are likely to remain supported at current levels by the continuing geo-political issues surrounding Russia and Ukraine and reports of fresh political unrest in Libya.
“Nonetheless, the sizable declines in oil production and the May loading schedules, suggest domestic exports are likely to remain pressured. On the flip side, following the Quarter-on-Quarter contraction in recently released NNPC fuel import allocations for the second quarter, imports are likely to trend lower, driven by oil imports.
“As in recent years, the latter decline could work to limit the impact of the lower exports on trade surplus over second quarter 2014.”