2023 Budget in danger as crude output crashes by 470,000 bpd


Implementation of the 2023 budget of N21.8 trillion is currently threatened as the nation has suffered a shortfall in crude oil output, amounting to 470,000 barrels per day, bpd in August 2023.

This represents 29 per cent fall from the budget benchmark of 1.69 bpd.

At the current global market price of $92 per barrel, the 470,000 bpd shortfall amounts to a loss of $43.2 million daily or N32 billion at the Central Bank of Nigeria’s exchange rate of N742.10/$. The budget was pegged on 1.69 million bpd and $75 per barrel and at the exchange rate of N437.57/$, the government expects to generate N2.29 trillion from the oil sector in 2023.

But in its September Monthly Oil Market Report (MOMR) obtained, the Organisation of Petroleum Exporting Countries (OPEC) disclosed that Nigeria produced 1.2 million bpd, excluding condensate, with output of 233,531 bpd meaning that the nation did not meet its production quota of 1.8m bpd during the period.

Crude oil theft was largely fingered as the factor responsible for the nation’s inability to meet either the budget benchmark or OPEC quota.

This is even as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), put the nation’s condensate output at 233,531 bpd (Blended and Unblended) during the period, indicating that the nation did not meet its set target.

Reacting to the development yesterday, the National President, Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi, said: “The current high crude oil prices currently standing at $92 per barrel could have reduced the negative impact of low output on the nation.

“But the nation is currently subsidising fuel import directly or indirectly as the prices of refined petroleum products have risen significantly in the global market.”

Also reacting, the Country Chair of Shell Companies in Nigeria, Osagie Osunbor, who confirmed the severity of oil theft in the company’s briefing, said: “We faced our biggest operational challenge in many years at SPDC, where a significant decline in crude receipts at the Bonny Oil and Gas Terminal resulted in our declaration of force majeure in March 2022.
“Unfortunately, along with other operators in Nigeria, SPDC continues to face the twin challenges of sabotage and crude oil theft, each of which not only deprives our country and our people of billions of dollars of tax revenue, but also endangers people’s lives.

“Sadly, we were reminded of these dangers in March 2023 when a fire incident occurred at the site of an illegal connection used for crude theft on the Rumuekpe-Nkpoku trunk line in Rivers State. The line was not operational at the time of the fatal incident.

“Crude theft poses a serious environmental risk that impacts not just oil and gas operations but also our communities. Our teams continue to collaborate with the Nigerian government and other stakeholders to eradicate crude theft from our facilities.”