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Nigeria Earned N4trn From Crude Export In 2017

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The Central Bank of Nigeria (CBN) has disclosed that the country generated a total of N4.1trilion as gross revenue from the sale of crude oil for the financial year ended December 31, 2017.

The amount translates to 3.6 per cent of the nation’s gross domestic product (GDP) for the period, representing 56.2 per cent of total federally collected revenue – an increase of 52.6 per cent above the level in 2016.

This, according to the CBN 2017 annual report released last week, came on the heels of the production of 627.80 million barrels (mb) of crude oil during the year under review.

Giving a breakdown of oil revenue, the CBN report stated that earnings from crude oil/gas export and petroleum profit tax (PPT)/royalties rose by 104.2 and 51.1 per cent to N795.4 billion and N1,801.4 billion, respectively.

The report attributed the development largely to improvements in crude oil price and subsisting peace deal in the Niger Delta, which had boosted crude oil production and export.

“Specifically, the average price of crude oil in the international market increased by 12.5 per cent, above the level in 2016, to $54.91pb in 2017.

Also, average crude oil production and export increased by 6.2 and 8.5 per cent, above the levels in 2016, to 1.72 mbpd and 1.27 mbpd, respectively, in 2017,” the report stated.

CBN however added that out of the said revenue, the sum of N1,237.0 trillion was deducted for the Joint Venture Cash (JVC) calls, N151.6 trillion for excess crude/PPT/royalty proceeds and N54.8 trillion for “others”, leaving a balance of N2,666.4 trillion for distribution to the three tiers of government.

According to the report, the country’s aggregate crude oil production, including condensates and natural gas liquids, averaged 1.72 million barrels per day (mbd), or 627.80 million barrels (mb) in 2017, compared with 1.62 mbd or 592.92 mb in the preceding year.

Aggregate export of crude oil was estimated at 1.27  mbd or 463.55 mb, compared with 1.17 mbd or 428.22 mb in the preceding year.

The CBN report stated that provisional data on the direction of Nigeria’s crude oil export during the period under review showed that Europe, as a group, remained the major regional destination. This was followed by Asia and the Far East, Americas, and African countries in that order.

On a country of destination basis, India ranked highest, followed by the United States of America, Spain, The Netherlands and South Africa in that order.

“Europe constituted 34.9 per cent of the total, with crude oil export of N3,845.72 billion. Within the group, Spain retained its top position, with a share of 8.8 per cent of the total, followed by The Netherlands (7.9 per cent), France (6.0 per cent), the United Kingdom (5.1 per cent), Italy (2.5 per cent) and Sweden (2.1 per cent).

On the sales of the commodity during the year, CBN stated that the average spot price of Nigeria’s reference crude, the Bonny Light (370API), was $54.91 per barrel in 2017, compared with the preceding year’s average of $48.82 per barrel, an increase of 12.5 per cent.

“The West Texas Intermediate (WTI) recorded an average price of $50.42 per barrel in 2017, representing an increase of 16.6 per cent, relative to the level in the preceding year. Also, the UK Brent and Forcados crude prices increased to $53.13 and $54.76 per barrel, respectively, relative to the levels in the preceding year.”

The report attributed the increase in oil prices experienced during the year to commitment of OPEC members to cap production under the Declaration of Cooperation (DoC), strong economic growth in China, as well as healthy financial markets, which helped to improve market fundamentals significantly.

It added that strong demand for crude imports in China and increased US refining activity that utilised more crude from inventories also helped in increasing the price.

Meanwhile, on the domestic market, CBN reported puts the estimated volume of petroleum products consumed in 2017 at 15.87 billion litres. This represented a decrease of 30.7 per cent when compared with 22.89 billion litres in 2016.

A breakdown by product showed that premium motor spirit (PMS) had the highest consumption with 13.3 billion litres (83.9 per cent); Automotive Gas Oil (AGO), 1.29 billion litres (8.2 per cent); Dual Purpose Kerosene (DPK), 0.65 billion litres (4.1 per cent); ‘others’, 0.31 billion litres (2.0 per cent) and LPFO, 0.30 billion litres (1.9 per cent).

Nigeria’s Capital Inflow Hits $5.5bn

The total value of capital importation into Nigeria in the second quarter of 2018 rose by 207.62 per cent to stand at $5.513 billion.

But while the second quarter inflow was a decrease of 12.53 per cent compared to the 2018 first quarter figure, it was a better performance than the second quarter of 2017, capital importation data released by the National Bureau of Statistics (NBS) has shown.

According to the statistics office, the decline recorded in the second quarter resulted from a decline in portfolio and other investments, which declined by 9.76 and 24.07 per cent respectively. The largest amount of capital importation by type was received through portfolio investment, which remained a major contributor to the capital inflow, accounting for 74.7 per cent or $4.119 trillion of total capital importation, followed by Other Investment, which accounted for 20.5 per cent or $1.132 trillion of total capital, and then Foreign Direct Investment (FDI), which accounted for 4.7 per cent  or $261.4m of total capital imported in the second quarter.

Since the second quarter of 2017, Portfolio Investment has been expanding faster than the other two categories. Although the absolute value of Portfolio Investment declined in Q2 on a quarterly basis, falling from $4.565 trillion in Q1, 2018 to $4.119 trillion in Q2, 2018, it remained the largest component of the total Capital Importation in the quarter under review, followed by Other Investments, and then FDI.

In the second quarter of 2018, total FDI stood at $261.35 million, growing by 5.97 per cent from the first quarter of the same year, but falling by 4.75 per cent when compared to the corresponding quarter of last year.

FDI represented only five per cent of the total capital import. Equity Investment dominated FDI in the second quarter, accounting for 97.85 per cent of total FDI received in the second quarter. Capital Importation in the form of Other Capital saw significant expansion, from only $5,000 as recorded in Q1 to $5.63 million in Q2, an increase of over 1000 per cent compared to the same period of last year.

Portfolio Investment remained the most significant component of total capital inflow into Nigeria in the second quarter of 2018, although it contracted by 9.76 per cent over the previous quarter. The total value of Portfolio Investment in Q2 recorded was a 434.64 per cent growth compared to Q2, 2017 figure of $770.51 million.

Investments in both Equity and Bonds (under Portfolio Investments) reported steady quarter-on-quarter growth, with 49.43 and 19.13 per cent respectively. It is worth noting that investments in Bonds under this Capital Importation type has been steadily increasing since Q2, 2017, and in Q2 2018, it accounted for 9.71 per cent of total Portfolio Investment.



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