Nigeria’s oil revenues plunged by 55% to $24.8bn in 2015- NEITI report

Nigeria’s oil and gas revenues plunged from $54.5 billion in 2014 to $24.8 billion in 2015, while the country’s oil production fell from 798 million barrels in 2014 to 776 million barrels in 2015, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed.

According to the NEITI 2015 Oil and Gas Industry Audit Report, the total outstanding revenue from the sector as at 2015 was $3.7 billion and N80 billion, while losses incurred stood at $2.2 billion and N60 billion, and unreconciled revenues amounted to N317 billion.

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“Beyond providing a snapshot of what transpired in 2015, this report reveals money to be recovered, leakages to be blocked, and urgent reforms to be undertaken,” said Waziri Adio, the Executive Secretary of NEITI, at the release of the report today. “The most critical takeaway is the need to expedite, expand and sustain reforms in this still critical sector of national life.”

The report shows that Nigeria suffered a 54.6% decline in oil revenues but only a slight 2.7% fall in oil production. “This was due to drastic reduction in the unit price of crude oil in the global market,” states the report. It will be recalled that the yearly average price of crude oil per barrel tumbled from $101.91 in 2014 to $52.16 in 2015.

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The report noted that the Oil and gas revenues have been declining since 2011 when total revenues peaked at $68.4b. A five-year analysis in the report reveals that revenues declined by 8%, 7.7% and 6% in 2012, 2013 and 2014 respectively. However, the decline leapt to double digits in 2015 when total revenue dwindled by more than half.

Total oil production also dropped but not by much: from 798 million barrels in 2014 to 776 million barrels in 2015. The report attributed the decline to oil theft and militancy. However, total gas production went up by 20.23% from 2, 593,090 mmscf in 2014 to 3, 250, 667 mmscf in 2015. The jump by a fifth was on account of the combined effect of an increase in gas utilisation and decline in gas flaring.

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According to the report, the total oil lifted in 2015 was 780 million barrels, about four million barrels higher than the amount produced with the balance drawn from previous years.

Of the 780 million barrels, the companies lifted 467 million barrels while NNPC lifted 313 million barrels. NNPC’s liftings were split almost evenly between Federation Export and Domestic Crude Allocation, which accounted for 159.4 million barrels and 153.9 million barrels respectively.

The report also noted that only 8.7 million barrels or 5.6% of crude oil allocated for domestic consumption went to the refineries in 2015 on account of the state of the refineries.