Nigeria earns twice more from gas than oil in Q1
Nigeria’s gas revenue outpaced its earnings from crude oil, the lifeblood of Africa’s biggest economy, in the first quarter of 2022, in keeping up with a trend that first emerged in December 2020.
Data obtained from the Nigerian National Petroleum Company Limited (NNPC) showed that while crude oil exports fetched the nation $177.86 million over the three-month period, revenue from gas feedstock to Nigeria LNG Limited (NLNG) amounted to $387.72 million.
“These are very unusual times in Nigeria’s oil and gas sector,” Joe Nwakwue, a former chair of the Society of Petroleum Engineers, said.
“The widening gap between Nigeria’s gas revenue and Nigeria’s crude oil export can be attributed to oil theft challenging the country which has gone beyond a crisis point.”
Oyinkepreye Orodu, head of Department of Petroleum Engineering at Covenant University, said crude theft is killing Nigeria’s oil business at historic levels, unlike Nigeria’s gas, which is in high demand because buyers are switching more to long-term Liquefied Natural Gas (LNG) contracts.
“Thefts combined with export terminal and pipeline shut-downs are limiting Nigeria’s ability to earn petrol dollars,” he said.
A further breakdown of NNPC’s data showed that in January 2022, Nigeria earned $75.88 million from crude oil, compared with the $84.45 million earned from gas feedstock to NLNG; in February, the country earned $13.05 million from crude oil, compared with $159.58 from gas feedstock to NLNG.
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In March, Nigeria earned $88.93 million from crude oil while gas feedstock to NLNG fetched the country $143.69 million.
“Feedstock gas receipt was $143.69m. This includes receipts of $54.72m and $21.29m, which were expected in the previous month but slipped into the current month. Other related NLNG receipt was $7.67m,” NNPC said in its latest presentation at the Federation Account Allocation Committee.
The NNPC data also showed that the trend of Nigeria’s revenue from feedstock gas to NLNG surpassing crude oil earnings has been consistent in the last 16 months.
Between December 2021 and December 2020, Nigeria raked in a total of $644.28 million from gas feedstock to NLNG while income from crude oil exports was $368.34 million.
“Unlike the crude oil business with lots of inconsistency, most especially recent crude theft issues, supplies of gas feedstock under are a long-term contract, which typically obligates the transaction to occur at agreed terms,” said Kelvin Atafiri, who runs Cavazanni.
