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Oil production falls below FG's projection

04 September 2012, 16:12

Abuja -   The Central Bank of Nigeria (CBN) said Monday that the country pumped 2.12 million barrels per day (bpd) of crude oil in the second quarter of 2012, which fell below the 2.48 million bpd which the Federal Ministry of Finance had projected in this year's budget.

It said in its second quarter review of the economy published on its website, that Nigeria’s crude oil production had risen from an average of 2.06 million bpd in the first quarter to 2.12million bpd in the second quarter.

Government’s official crude oil figures normally come from the National Bureau of Statistics (NBS), but the CBN, the Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) sometimes give output figures on an ad hoc basis, which rarely match up.

The CBN’s crude oil output data usually comes in lower figures from the NNPC and the oil ministry.

The NNPC and the ministry are saddled with the responsibility of reporting the progress in the industry's performance, and also have the best access to the data.

The NBS admits that its own official figures rely on data provided by NNPC.

The NNPC at the weekend restated that the country’s current crude oil production figure, which peaked at an all time high of 2.7 million bpd in August, was real.
Group Managing Director of NNPC, Mr. Andrew Yakubu, said the current crude oil production figure was not exaggerated as insinuated in some quarters.

However, Reuters reported that if the CBN figures are correct, the country needs a lift in output in the second half of the year to fund all the spending in this year's budget without taking on more debt or lowering its oil savings rate.

The benchmark oil price in the budget is $72 a barrel, well below the market price and above which the country is supposed to save extra revenues in the Excess Crude Account (ECA). But if production fails to meet projections, the government may be compelled to take more money back from the ECA to meet the shortfall.

Coordinating Minister for the Economy and Minister for Finance, Dr. Ngozi Okonjo-Iweala, told Reuters last month that when putting the budget together, her ministry lowered the production projections given to them by the Ministry of Petroleum Resources.

NNPC said last month that crude oil production reached an all-time high of 2.7 million bpd but industry experts have questioned these figures, which are at the top end of the country's capacity and come during a period when oil theft by criminal gangs is at record high.

But the group managing director of NNPC said that Nigeria’s oil and gas sector had benefitted from various proactive measures initiated to forestall challenges such as crude oil theft and pipeline vandalism that had retarded its growth.

He said the country’s crude oil production was made possible by collective efforts of major stakeholders in the country’s petroleum sector to take on such challenges.



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