Saturday, August 31, 2013
Nigeria earns N2.7bn extra daily as oil price jumps over Syria strike fears
chemical weapon attack in Syria.
Nigeria should be drawing an extra N2. 7 billion in daily oil export
revenues since the last one week and the amount should climb more in
days ahead, as fears over a US-led military strike on Syria escalates
Although Syria is not a major oil producer or transit point, investors
fear that western intervention there could spill over into the rest of
the region, potentially affecting oil supplies from other producers
such as Iraq.
The United States has vowed to militarily respond to a chemical weapon
attack in that country last week.
After climbing to a two-year high above $112 (N18, 000)a barrel in
early trading on Wednesday, Brent crude oil price rose by about 1.5
per cent in London Wednesday near a six-month high level, closing at
$114.34 (N18, 500).
The production figures courtesy of the Organization of Petroleum
Exporting Countries, OPEC, showed that Nigeria's daily production
capacity declined steadily from about 2.03 million barrels at the
beginning of the year to 1.871 million barrels in June and 1.610
million barrels in July.
With current average production capacity of about 1.6 million barrels
per day, rough estimates put Nigeria's average revenue earning in the
wake of the crisis at about$114 per barrel, which translates to about
$18.24 million (about N2.684 billion) daily.
Nigeria has already been reaping an average of $25.94 (N4, 200) as
extra revenue from every barrel of crude oilexported since the
beginning of the year, with average price at about $104.94 (N17, 000)
per barrel, and budget benchmark for 2013 at $79 (N12, 800) per
The escalation of the Syria crisis following last week's chemical
weapon attack, shot barrel price of oil to an average of $112.92 (N18,
300) per barrel last Wednesday and about $116.34 (N18, 800) per barrel
The crisis may well provide a veritable opportunity for Nigeria to
recoup part of its losses from crude theft andvandalism.
The Federal Government says it has lost over 146 millionbarrels of
crude oil estimated at about $11.794 billion (about N1.852 trillion)
to theft, deliberate sabotage, and pipeline vandalism between 2009 and
2011, according to the latest audit report by the Nigerian Extractive
Industries Transparency Initiative (NEITI), Nigeria stands to benefit
from the rising price scenario.
U.S. threat to intervene in the crisis triggered panic in commodity
markets in the Far East, with brokers expressing concerns about
possible disruptions in the supply of oil to the industry in the
"In the event of a military operation in Syria, oil prices may rise
further," a market analyst representing the Bank of New York, Michael
Whitner, said. "A possible attack on Syria will affect the region and
the crisis mayspread to neighboring countries, leading to disruptions
in the supply of raw materials throughout the Middle East."