Nigeria’s earnings from the oil and gas industry declined by 2.62 per cent to N3.973 trillion in the first nine months of the year, from January to September 2019, according to data obtained from the Central Bank of Nigeria, CBN. The CBN, in its Economic Report for the Third Quarter of 2019, disclosed that gross oil revenue in the nine-month period dipped slightly by N107 billion, compared to N4.08 trillion recorded in the same period in 2018.
Giving a breakdown of gross oil revenue this year, the CBN report noted in the first, second and third quarters, N1.41 trillion, N1.219 trillion and N1.34 trillion oil earnings were recorded, respectively, compared to N1.288 trillion, N1.398 trillion and N1.394 trillion recorded in the same periods, respectively, in 2018. Furthermore, gross oil revenue in the nine-month period of 2019, according to the report, comprised crude oil and gas exports earnings of N281.35 billion, Petroleum Profit Tax/Royalties of N2.582 trillion and other oil earnings of N1.109 trillion.
This was in comparison to revenue of N312.02 billion, N2.682 trillion and N1.086 trillion gotten from crude oil and gas exports, PPT/Royalties and others, respectively, in the same period in 2018. Irrespective of the decline in oil revenue components, the CBN report noted that gross total federally-collected revenue appreciated by 5.3 per cent from N1.086 trillion in the first nine months of 2018 to N1.109 trillion in the period under review. Non-oil revenue, according to the report, also rose significantly by 16.62 per cent to N3.319 trillion in the first nine months of 2019, compared to N2.846 trillion in the same period in 2018. In its analysis of third-quarter figures, the CBN report stated that; “At N2.7 trillion, federally-collected revenue in the third quarter of 2019 was lower than the quarterly budget of N3.759 trillion by 28.2 per cent. It, however, rose by 18.3 per cent above receipts in the preceding quarter. “The decline in federally-collected revenue (gross), relative to the quarterly budget, was attributed largely to shortfalls in receipts from oil revenue in the review period. “Gross oil revenue at N1.34 trillion or 49.6 per cent of the total receipts was below the quarterly budget by 44.6 per cent but was above the receipt in the preceding quarter by 9.9 per cent.
The decline in oil revenue relative to the quarterly budget was due, largely, to shortfalls in all the components of oil revenue, except domestic crude oil and gas sales.” The report further stated that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged 1.89 million barrels per day, MBD, in the review quarter, representing an increase of 1.6 per cent, compared with 1.86 mbd produced in the preceding quarter.
The report attributed the increase in production to the re-opening of some major oil installations earlier shutdown, including the contributions from the start-up of the new Total Egina field. “The average spot price of Nigeria’s reference crude oil, the Bonny Light (37° API) fell from $71.32 per barrel in the second quarter of 2019, to $65.21 per barrel in the third quarter of 2019. This represented a decrease of 8.6 per cent and 14.7 per cent below the levels in the preceding quarter and the corresponding period of 2018, respectively. “The development was due, largely, to tightened crude oil supply in the global oil market, majorly to high U.S crude stockpiles in the period and worries over escalating US-China trade dispute. The UK Brent at $63.42 per barrel, Forcados at $65.28 per barrel and WTI at $57.25 per barrel exhibited similar trends as the Bonny Light,” the CBN added.