Organisation of the Petroleum Exporting Countries (OPEC) has said that Nigeria’s crude oil production dropped by 150, 000 barrels per day (b/pd) in July.
An OPEC data indicated that the country’s production was said to have crashed after a disruption on the Trans Niger pipeline, in the Niger Delta region.
However, confirming disruption of production, Minister of State for Petroleum Resources, Dr.Ibe Kachikwu, said the challenge is due to ageing facilities.
He said,
“We continue to have challenges, some of our pipelines are old; so, these are basically technical. They are not militancy-induced stoppages, but they are basically maintenance-induced stoppages.”
According to OPEC, the disruption in Nigeria’s July production figures, caused crude oil price to rise above $50p/b in the month. Kachikwu said Nigeria’s oil production was slightly below 1.8b/d in July, adding that condensates accounted for an extra 450, 000b/d to the country’s output in July.
Nigeria, a member of OPEC, the international oil cartel, was until recently Africa’s largest producer of crude oil, a position he relinquished to Angola, the nation’s Southern African neighbor.
Over the last decade, Nigeria, Africa’s largest population has been contending with myriads of challenges, such as militants’ attacks, pipeline vandalisation, kidnappig, crude oil thefts and other security issues, all which had had a negative impact on the sector. However, as OPEC moved to cut oil production with a view to stabilising the market, Nigeria and Libya were exempt, thus providing the two countries some leverage to savour.
For example, while Nigeria got except due to its internal security challenges, like pipeline vandalisation and Boko Haram insurgency, Libya was exempt because of its internal crises arising from the overthrow overhang of its former leader, Muhammad Ghadafi.
Over the last 40 years, Nigeria’s external revenue had been largely buoyed and driven by crude oil.The country, has therefore, been financing its ever growing public expenditure mainly through oil revenue, with little percentage contributions from other sectors like solid minerals, agriculture and tourism.
In line with its Constitutional provision, revenues derivable from oil export are shared among the three tiers of government- Federal,36 states and and 774 local government areas. But following oil crash, dwindling oil revenue, President Muhammadu Buhari-led All Progressives Congress(APC) government has enunciated aggressive policy on economic diversification.
The government has also initiated Economic Recovery Growth Plan( EGRP) to rejigs the economy and put it on a sustainable path of development.
