OrderPaperToday – Nigeria’s oil and gas sector generated $17.05 billion in 2016, representing the lowest inflow in the last ten years.
This revelation is contained in a report by the Nigeria Extractive Industries Transparency Initiative (NEITI) Audit Report which was released on Friday.
According to a statement signed by Orji Ogbonnaya Orji, NEITI’s Director, Communications and Advocacy, the decline was as a result of low oil prices in the global market and reduced oil production occasioned by vandalism of pipelines and crude oil theft.
As a result, there was a 31% decline in the sector’s earnings from $24.79 billion generated in 2015, and a 75% drop from $68.44 billion generated in 2011, leading to a 9.5% drop in the sector’s contribution to Gross Domestic Product (GDP).
“The bombing of the under-water 48-inch Forcados Oil Loading/Export Pipeline was one of many major occurrences that befell the industry in the year under review.
“This incident occurred in February 2016 and the line remained in-operational for seven months. Shell Petroleum Development Company (SPDC) declared force majeure on lifting from Forcados on 21st February 2016.
“Companies injecting into the Forcados Terminal such as SEPLAT, PANOCEAN, MIDWESTERN, ENERGIA, PLATFORM, PILLAR, WALTERSMITH, and EXCEL shut down production for over 147 days,” the NEITI report stated.
Further examination of the 2016 revenue figures showed that export and domestic sale of crude oil and gas generated $7.97 billion, Petroleum Profit Tax (PPT) generated $4.21 billion, while royalty oil generated $1.57 billion.
Another highlight of the report is that for the first time, crude oil produced from Production Sharing Contracts (PSCs) overtook output from the Joint Ventures (JVs) in 2016.