Nigeria, the largest African producer in OPEC, lost an estimated $487.5 million from oil revenues as force majeure and sabotages led to a decline of 6.596 million barrels of oil in its production in December 2021, This Day outlet reported on Monday, citing data from the Nigerian National Petroleum Corporation (NNPC).
The loss in Nigerian oil production means that the country failed to take advantage of an average $75 a barrel oil, losing nearly half a billion in proceeds.
The oil and gas sector accounts for about 10 percent of Nigeria’s gross domestic product (GDP), and petroleum exports revenue represents around 86 percent of total exports revenue for the African oil producer, according to OPEC.
Nigeria has been struggling with force majeure and the inability to ramp up production as part of the OPEC+ monthly increase in quotas. Its production is around 300,000 barrels per day (bpd) below what it should be under the OPEC+ agreement.
For example, Nigeria’s crude oil production fell by 43,000 bpd from November to 1.338 million bpd in December 2021, according to OPEC’s Monthly Oil Market Report (MOMR).
Under the OPEC+ deal, Nigeria’s required production for December was 1.666 million.
Not only is Nigeria losing oil revenues, but it is also the key contributor to a tighter-than-expected global oil market because of its inability to increase production.
The International Energy Agency (IEA) noted in its January monthly report earlier this month that global oil supply inched up by just 130,000 bpd in December, to 98.6 million bpd, “as outages in Libya and Ecuador and a smaller than scheduled increase from OPEC+ wiped out much of the expected growth.”
OPEC+ producers delivered total gains of 250,000 bpd last month, well below the allocated amount, and were 790,000 bpd below the group’s target due to under-production in Nigeria, Angola, and Malaysia. For the first time since the cuts were introduced in May 2020, Russia also pumped below its quota, the agency said.