Nigerian is OPEC laggard with $51 per capita oil income
Sopuruchi Onwuka
Nigeria sits at the base of the per capital oil income ladder of the Organization of Petroleum Exporting Countries (OPEC), posting paltry $51 income for each of her citizens in the first five months of the year.
According to latest industry analysis by the Energy Information Administration (EIA) of the United States, Nigeria is the only OPEC country to post per capita oil income of less than $100 and the only African members of the oil exporters group to post per capita income of less than $200.
This implies that the nominal and not real distribution of oil revenue among citizens of the oil exporters’ group is lowest in Nigeria from January to May, 2023. And the EIA projects that the country’s per capita oil income for the whole year will stand at $124, still the lowest in the group where Venezuela which is the nearest to Nigeria is estimated to post per capita oil income of $365. Venezuela has already recorded $115 per capita revenue in the first five months of 2023.
The Oracle Today reports that data on Nigeria’s oil production and associated revenues differ from one institution or organization to another. Even in Nigeria, the figures differ among government agencies including the Nigerian National Petroleum Company (NNPC) Limited, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS) and the Central Bank of Nigeria (CBN). And the data discrepancies have regularly created accounting disputes that warrant regular inquiries from the National Assembly.
There is no visible data board for Nigeria’s upstream petroleum industry, and operating firms in the country are not allowed to announce production figures to the public. However, pieces of information regarding Nigeria’s oil and gas production figures are gleaned from financial reports of international companies operating in the country whose terminals are used for export.
In the report, the EIA based its assessment on all petroleum liquids exported from the country, including crude oil, condensate and natural gas liquids.
The report which was published weekend shows that Nigeria has remained the main OPEC laggard in capturing value from the prevailing bullish international oil market where prices have been supported by the raging trade and diplomatic disputes arising from the Ukraine war.
In the table of net oil export revenues for OPEC countries since 2021, Nigeria posted historical poor performance in per capita income. It recorded $134 in 2021, $155 in 2022, and $51 in the first five months of 2023. And the EIA estimates that Nigeria will end 2023 with per capita oil income of $124.
For next year, Nigeria’s per capita oil income is projected at $126.
The per capita oil income estimates shows that Nigeria is the poorest oil exporter in OPEC, even poorer than other member countries like Gabon and Equatorial Guinea whose oil outputs are less than 10 percent of Nigeria’s total export.
According to the EIA, Nigeria earned $27 billion from oil export in 2021, $34 billion in 2022, and will end up with $29 billion in 2023. Projection is that the country’s oil export income will rise to $31 billion in 2024. Total oil export income in the first five months of 2023 ending in May stood at $11 billion.
Total oil income to African members of OPEC in the first five months of 2023 is $52 billion, with Algeria and Angola leading with $12 billion each. Nigeria and Libya follow with $11 billion each. Congo Brazzaville earned oil export income of $3.0 billion in the period, Gabon posted $2.0 billion, and Equatorial Guinea recorded a billion dollars in the period.
However, when it comes to per capita income which is the index of resource wealth distribution, Libya tops the African chart for OPEC with $1,666 in the first five months of the year. Gabon follows with $888; Equatorial Guinea comes with $632; Congo Brazzaville records $452; Angola posts $337; and Algeria reports $263. Nigeria rests at the bottom of the entire OPEC table with meagre $51.
Within the OPEC group, output and export volumes hardly correspond with per capita oil export income due to population numbers. Whereas the Saudi Arabia leads oil income, Kuwait remains the prosperity champion of the group.
In the first five months captured by the EIA, Saudi Arabia earned oil income of $97 billion, followed by Iraq with $40 billion, and the United Arab Emirates with $39 billion. Kuwait enters with $31 billion; Iran follows with $18 billion, and Venezuela recorded $3.0 billion.
On per capita basis, Kuwait leads OPEC’s oil export income with $7,207; and the United Arab Emirates follows with $4,106. Saudi Arabia came third with $2,712; and Iraq follows with $871.
The EIA estimates that OPEC members earned about $888 billion in net oil export revenue in 2022, “nearly 43% compared with the previous year, when OPEC net oil export revenue totaled an estimated $622 billion (real $).”
The increase in net export revenue in 2022 is mostly attributable to higher crude oil prices, and to a lesser degree to higher petroleum liquids production, the agency explained, adding that OPEC’s total oil output rose to nearly 34.2 million barrels per day (b/d), increasing 2.5 million b/d year-on-year.
“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,” EIA stated.
In projecting into 2024, the EIA declared that OPEC’s net export revenue will rise to $682 billion in response to expected rise in oil prices.
“In tandem with a forecast increase in OPEC output in 2024, based on the June 2023 STEO, we expect that OPEC net export revenue will rise to $682 billion (real $). We forecast that global crude oil prices will increase in 2024, reflecting global oil inventories that will decrease in each of the next five quarters,” the EIA stated.
