Nigerian oil output slumps

Sept. 5, 2012 at 1:11 PM
share with facebook
share with twitter
Sign up for our Energy newsletter

LAGOS, Nigeria, Sept. 5 (UPI) -- Nigeria's oil production has fallen below government projections.

Nigeria's Federal Ministry of Finance had projected in this year's budget that the country's output would be 2.48 million barrels per day. The Central Bank of Nigeria has reported that instead the nation produced 2.12 million bpd of crude oil in the second quarter of 2012, resulting in a deficit of 36,000 bpd.

On a posting on its Web site CBN said in its 2012 March-June review of Nigeria's economy that the country's crude oil production had risen from an average of 2.06 million bpd in the period January-March to 2.12 million bpd in the second quarter, This Day newspaper reported.

Nigeria is Africa's most populated country and with an estimated 130 million inhabitants.

A member of the Organization of Petroleum Exporting Countries, Nigeria is the world's 14th largest oil producer. With oil running at roughly $100 per barrel, that generates $250 million in income per day -- $19.25 billion annually -- and probably more as Nigeria regularly evades OPEC quotas.

Nigeria's oil output is beset by a number of problems, including rampant corruption in the country's oil sector and even piracy.

For decades Nigeria's oil output has proven irresistible to the country's corrupt elements.

In October 2006, Nuhu Ribadu, head of Nigeria's Economic and Financial Crimes Commission noted that more than $380 billion has been taken by Nigerian governments since independence in 1960.

A July 2010 academic study of corruption in Nigeria noted that successive governments have mismanaged the oil wealth, "salting it away in foreign bank accounts rather than investing in education, health and other social investment and mismanaging the national economy to the point of collapse."

The U.N. Office on Drugs and crime said of the roughly Nigeria $1 trillion the country's energy sector has earned since independence in 1960 and through 1999, about $400 billion was stolen. Former Nigerian President Sani Abacha, who led the country from November 1993 until June 1999, alone is estimated to have stolen the equivalent of 2-3 percent of the country's gross domestic product for every year he was president.

This massive theft has come at the cost of the Nigerian populace. The U.N. Children's Fund reports that 70.8 percent of Nigeria's population subsists on less than $1 per day and 92.4 percent on less than $2 a day.

Nigerian President Goodluck Jonathan this year established a Joint Military Task Force, "Operation Restore Hope," to protect oil installations in the Niger Delta. Nigeria's Minister of Petroleum Resources Diezani Alison-Madueke stated that in 2011 thefts of crude oil were more than $7 billion.

As for piracy, on Wednesday, a Nigerian navy warship recaptured the hijacked Abu Dhabi Star oil tanker. Its crew of 23 Indian sailors was unhurt. The Nigerian navy found no pirates on board the Abu Dhabi Star.

The attack is the third recent oil tanker attack in the Gulf of Guinea. Recent estimates are that piracy costs the global shipping trade more than $9 billion a year.

Related UPI Stories
Trending Stories