Nigeria Loses Whopping N2.2 Trillion Due To Crude Oil Production Deferment

Data from the Nigeria Extractive Industries Transparency Initiative for 2021 reveals Nigeria lost N2.2 trillion in one year due to the Deferment of crude oil output and the massive loss also occurred in 2020.

The finding comes after the country’s crude oil production has been consistently low for the past two years.

Deferment is a reduction in production or injection availability caused by an activity, breakdown, trip, poor equipment performance, or sub-optimal operations, resulting in a drop in volume sold or injected and deferring production or injection to a later time.

The deferment was documented by crude oil businesses such as SNEPCO, CNL, NAOC, SPDC, NPDC SEPLAT, Newcross E & P, and APENL, according to NEITI’s Oil & Gas Report 2020.

Continental, Energia, AITEO, Oriental, APDNL, Consolidated, Waltersmith, AND Chorus are among the other companies functioning in the country.

Shell Nigeria Exploration and Production Company (SNEPCO) had the largest delay of roughly 25% (17.8 million barrels per day), followed by Chevron Nigeria Limited (CNL) with 17% (12.2 million barrels per day).

The Nigerian Agip Oil Company (NAOC) came in third with 15.4 per cent (11.1 million barrels per day), followed by Shell Petroleum Development Company (SPDC) with 15.1 per cent (11 million barrels per day).

In that year, the Nigerian Petroleum Development Company (NPDC SEPLAT) deferred 7.4 million barrels per day, or 10.2% of total output, while NewCross E&P deferred 4.2 million barrels per day, or 5.8% of total output.

Addax Petroleum Exploration Nigeria Ltd (APENL) was unable to produce 2.3 million barrels per day, or 3.1 percent of its oil, in that year; Continental deferred 2.1 million barrels per day, or 3%; and SEPLAT deferred 1.3 million barrels per day or 2% of its production.

In total, 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 or N2.2trn.