Nigeria’s average monthly crude oil production and oil prices at the international market from January to June 2023 have put the extra income realised by this nation above the 2023 budget benchmark price at N511.407 billion or $1.096 billion, The Nigerian Observer can reveal.
The extra income was derived using the monthly production level as published by the Organisation of Petroleum Exporting Countries (OPEC), daily crude oil prices by OPEC, Nigeria’s 2023 budget benchmark price of $75 per barrel for crude oil sale, juxtaposing this with the latest OPEC Revenues Fact Sheet published by the Energy Information Administration (EIA) on June 28, 2023.
Nigeria produced 1.308 million barrels per day in January 2023, according to the OPEC Monthly Oil Market Report for April 2023. At an average price of $84.78 per barrel in January, revenue from crude oil sales amounted to $2.328 billion in January.
At the 2023 budget benchmark of $75 per barrel, Nigeria would have earned $2.06 billion as revenue, leaving Nigeria with an extra income of $268.64 million above the budget benchmark revenue.
Crude oil production averaged 1.371 million barrels per day for February, according to OPEC data. With crude oil prices averaging $86.04 per barrel in February, Nigeria earned $2.359billion whereas the budget benchmark price of $75 per barrel would have generated $2.056 billion, resulting in an extra income of $302.716 million.
OPEC stated that Nigeria’s daily production averaged 1.354 million barrels per day in March; 1.098 million barrels per day in April; 1.277 million barrels in May, and 1.298 million barrels in June.
Crude oil prices averaged $81.12 per barrel in March; $86.06 per barrel in April; $76.91 per barrel in May, and $76.94 per barrel in June 2023. The March 2023 production and crude oil prices effectively left Nigeria with revenue of $2.526 billion in March, representing $190.59 million above the crude oil benchmark price revenue of $2.335 billion.
The April production and crude oil prices resulted in $1.795 billion earnings for Nigeria, and that was $230.733 million above the budget benchmark revenue of $2.011 billion.
In May, with production averaging 1.277 million barrels per day, and crude oil prices averaged $76.91 per barrel; Nigeria earned $2.062 billion as revenue compared with $2.011 billion that would have resulted from the budget benchmark, leaving an extra income of $51.220 million.
The summation of Nigeria’s actual earnings from January to May 2023 added up to $11.072 billion, which is almost the same as the $11 billion revenue reported by EIA for Nigeria for the same period in 2023.
Furthermore, production averaged 1.298 million barrels per day in June 2023 while crude oil prices traded averagely at $76.94 per barrel, indicating actual revenue of $2.097 billion as against $2.044 billion that would have come in based on the 2023 budget benchmark price. Earnings above the 2023 budget benchmark stood at $52.88 million in June.
According to the exchange rate data from the Central Bank of Nigeria (CBN), Nigeria’s currency, the naira, exchanged at an average price of N455.27/$ in January 2023; N460.43/$ in February; N460.43/$ in March; N460.43/$ in April; N460.71/$ in May, and N607.75/$ in June.
The conversion of the extra revenue above the budget benchmark gave N122.302 billion in January; N139.379 billion in February; N87.752 billion in March; N106.236 billion in April; N23.597 billion in May, and N32.138 billion in June, cumulatively adding to N511.407 billion from January to June 2023.
Nigeria established the Excess Crude Oil Account (ECA) to save extra income generated from the sale of crude oil above the annual budget benchmark. As of April 2023, the total balance in ECA amounted to $473,754.57.
Meanwhile, EIA has projected that OPEC revenue will fall by year end, following the continued implementation of the production cut agreement by OPEC+.
“We forecast that OPEC net oil revenue will fall to $656 billion (real $) in 2023. This decrease is attributable to lower OPEC production as a result of the extension of the OPEC+ agreement, along with a decrease in crude oil prices. We expect OPEC total oil liquids production to decrease to 33.5 million b/d in 2023, while the forecast Brent spot price will fall from $101/b in 2022 to $80/b.
“On a per capita basis, OPEC net oil export revenue rose from $1,205 in 2021 to $1,685 in 2022. We forecast that 2023 per capita revenue will fall to $1,219, adjusted for inflation,” EIA said in its June 2023 OPEC Revenues Fact Sheet.
