Oil Earnings Hit N1.68tn in Q1, 2023

Crude Oil Prices

Nigeria’s crude oil earnings rose to over N1.68tn in June 2023 following an increase in the country’s output last month, an analysis of latest oil production figures released by the Federal Government showed.

Data obtained on Thursday from the June 2023 crude oil production report of the Nigeria Upstream Petroleum Regulatory Commission indicated that the country’s daily oil output in the review month rose to 1,248,960 barrels.

Nigeria had pumped 1,183,691 barrels of crude oil daily in May, which was 65,269 barrels lower than what the country produced in June.

The new report also stated that the total crude oil output in June was 37,468,798 barrels, up from a total of 36,694,427 barrels that was produced in the preceding month of May.

This implied that Nigeria’s oil output increased by 774,326 barrels in June when compared to what it produced in May.

Data from the World Bank put the average cost of crude oil in June 2023 at $74.89/barrel. By delivering an increased production of 37,468,798 in June, it implied that the country raked in about $2.81bn from the commodity last month.

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Therefore, at an average exchange rate of N600.43/$ in June, according to data from dollar/naira spot exchange rates for 2023, it meant that the Federal Government’s oil earnings in June rose to N1.68tn.

It was about N1.28tn in May when the average price of crude oil and the exchange rate in that month were $75.70/barrel and N461.4/$ respectively.

The average exchange rate of the dollar increased in June, as the Central Bank of Nigeria unified the country’s exchange rates into the Investors and Exporters window on June 14, 2023, allowing market forces to determine the rate.

Oil output from Nigeria had been fluctuating since the past one year, as the country recorded its lowest oil production volume of 0.937 million barrels per day in September 2022. The Federal Government and oil sector players blamed this on the massive crude theft in Nigeria’s oil rich Niger Delta.

The situation also led to revenue losses for the country, international oil companies operating in NIgeria, as well as indigenous operators in the industry.

But the country’s oil output started improving after September, following concerted efforts by security officials and oil operators, as industry figures showed that crude production rose to 1.014 million barrels per day in October.

This indicated an increase of 0.077mbpd when compared to the 0.937mbpd output in September. In November, the country pumped 1.185mbpd crude, representing an increase of 0.171mbpd when matched against what was produced in October.

The rise in output continued in December last year, as Nigeria produced 1.253mbpd in that month, indicating an increase of 0.05mbpd when compared to its output in November.

The 1.258mbpd oil production in January 2023 was about 23,000bpd higher than the 1.235mbpd crude oil output in December 2022.

The momentum was sustained in February, with an output of 1.31mbpd. But the volume dropped to 1.27mbpd in March, putting an end to the seven-month run in Nigeria’s oil output. It further went down in April to 0.998mbpd.

Latest data from the NUPRC, on Thursday, showed that the rise in oil production in May was sustained in June, as the country pumped 1,183mbpd in May, while its output rose to 1.25mbpd in June.