The Federal Government Of Nigeria mislaid a large sum of N2.1 trillion due to crude oil production deferment in the last year.
The 2021 statistics, obtained from the Nigeria Extractive Industries Transparency Initiative (NEITI), said a huge loss was recorded in 2020. The revelation comes on the heels of the country’s perpetual low crude oil production in the past two years.
Deferment is the reduction in production or injection availability caused by an activity, breakdown, trip, poor equipment performance, or sub-optimum operations, resulting in a reduction in the volume sold or injected, delaying the production or injection until a later time.
According to the NEITI’s Oil & Gas Report 2020, the deferment was recorded by crude oil companies, including SNEPCO, CNL, NAOC, SPDC, NPDC SEPLAT, Newcross E & P, and APENL.
Others are Continental, Energia, AITEO, Oriental, APDNL, Consolidated, Waltersmith, AND Chorus operating in the country.
A breakdown of the loss revealed that Shell Nigeria Exploration and Production Company (SNEPCO) recorded the highest deferment of approximately 25 percent (17.8mn/b), followed by Chevron Nigeria Limited (CNL), 17 percent (12.2mn/b).
The Nigerian Agip Oil Company (NAOC) ranked third on the list with 15.4 percent (11.1mn/b), and Shell Petroleum Development Company (SPDC) with 15.1 percent (11mn/d).
The Nigerian Petroleum Development Company (NPDC SEPLAT) deferred 7.4m/b or 10.2 per cent/b of the production, while NewCross E&P deferred 4.2m/b or 5.8 percent of output year.
Addax Petroleum Exploration Nigeria Ltd (APENL) could not produce 2.3mn/b or 3.1 percent of its oil in that year, Continental deferred 2.1mn/b or 3 percent, while SEPLAT deferred 1.3mn/b or 2 percent of its production that year.
The Nigerian Petroleum Development Company Ltd deferred 1.2mn/b or 1.7 percent production in the year under review, while Energia could not produce 966t/b or 1.3 percent.
Aiteo deferred approximately 470t/b, or 1 percent; Oriental, 265t/b or 0.1 percent; and Addax Petroleum Development Nigeria Limited (ADPNL) deferred 144t/b or 0.20 percent.
Consolidated Oil Limited could not produce 44t/b or 0.06 percent; Waltersmith, 24t/b or 0.03 percent; Chorus Energy Limited ranked last on the deferment list with 5t/b or 0.01 percent.
The country lost approximately 73mn/b to crude oil production deferment in 2020. International Brent sold at $71 in 2020, pegging total revenue loss to deferment by Nigeria at $5.2bn of N2.2trn.
A similar report by the NNPC for August 2021 put crude oil production loss to deferment in April the same year at 3.3mn/b. Brent was $71/b in 2021. Total revenue loss to deferment in just April last year was N248mn.
A breakdown of the NNPC’s report said injection into Forcados was curtailed due to the Seplat shutdown for planned TFP repairs. Pan Ocean OML 147 shut-in production to avoid tank top and industrial action.
Also, some stations were shut down on 11/03/2021 for Trans Ramos Pipeline repairs. The cumulative loss for the period was 1.5mn/b.
Production shut down due to maintenance in Yoho and Ima terminals amounted to a 210,000b and 31,000b loss. The power outage resulted in a shutdown on 30/01/2021 at the Bonga terminal. This gave an aggregate loss of 1,000,000b.
There was also a shutdown at Akpo and Erha due to gas detection at the starboard riser and repairs of the epoxy pipe. Also, Jisike was shut down due to industrial action by PENGASSAN. The cumulative loss of production within the period was 35,000/b, 560,000b, and 13,500b.
The Egina Terminals was shut down due to power failure, while Pennington Terminal was shut down for vessel swap and SPM B chain adjustment. These amounted to an aggregate loss of 65,000b and 125,000b, respectively.
Aside from the loss to deferment, Nigeria loses huge revenue to oil theft.
According to the GMD, NNPC, and Mele Kyari, the country loses an average of 200,000 barrels per day to oil thieves, translating to 73million barrels in a year. Using an average crude oil price of $100 per barrel, Nigeria loses over $7.3bn in a year or five years (between 2016 and 2020), an estimated $14.65bn, considering the cost of oil per barrel in the years under review.
