New Telegraph

Oil Sales: Marketers hint on sustaining N1.27trn monthly revenue

Sustenance or enhancement of strategies that led to Ni- geria earning N1.27 trillion in May 2023 from crude oil sales are not only desirable and profitable but would also make Nigeria shore up its much-needed foreign exchange earnings for debt servicing, governance and national development. Marketers under the Major Oil Marketers Association of Nigeria (MOMAN) said Nigeria should continue to ramp up its crude oil production so as to continue to earn foreign exchange from crude oil revenue. Executive Secretary, MOMAN, Clement Isong, suggested the adoption of a fundamental approach to shore up Nigeria’s production and for the nation to continue to earn fat revenue from crude oil sales. He also said Nigeria should discuss with other members of OPEC to negotiate for an increase in the quota for the country. Recall that the nation’s crude oil production rose by 6.73 million barrels to 36.7 million barrels in May 2023, according to data obtained from the Monthly Oil Market Report of the Organisation of Petroleum Exporting Countries (OPEC) for June 2023.

The production increase led to a cumulative revenue of about N1.27 trillion in May. According to OPEC, crude oil production figures it received based on direct communication from Nigeria showed that the country pumped 999,000 barrels of oil per day in April, but this moved up to 1,184,000 barrels per day in May. Statistica, a global data firm, showed that the average cost.of Brent, the international bench- mark for crude, in April and May was $75/barrel and $80/barrel respectively. By producing a total of 29.97 million barrels of crude oil in April 2023, at an average price $80/ barrel, Nigeria earned about $2.4 billion (N1.1tn at the official ex- change rate of N461/$, as of April this year).

Also, by pumping out 36.7 mil- lion barrels of crude in the month of May, at an average cost of $75/ barrel, Nigeria’s oil earnings rose to about $2.75 billion, an equiva- lent of N1.27 trillion, based on the official exchange rate of N461/$ as of May 2023. It was, however, observed that while the cumulative difference in oil production by Nigeria in both months was over six million barrels, there was a drop in the average cost of crude from about $80/barrel in April to $75/barrel in May.

Isong said: “It is extremely im- portant that production continued to go up for us to meet our OPEC quota. Because that is the key source of foreign exchange. For the foreign exchange rate not to get too high, we need the highest production possible. So it is good news indeed. “To ensure high production, be- cause of the members of OPEC, we need to go there and negotiate and ask them for some sort of re- prieve because we have not been meeting our quota in the last few months and we are under a lot of pressure right now. We can go and talk to them. They are our friends and ask them for some sort of re- lief. “In discussing with our col- leagues in OPEC, we need to show them the challenges that we have had in the last couple of months. For one reason or the other, we have been unable to meet our quota in spite of measures, and the things in Nigeria such as the removal of the subsidy, and unification of the exchange rate. “These are very positive. So Ni- geria is under a lot of stress right now. They can take these into consideration.

Maybe they can raise our quota level or ceiling. “Then whatever it is that we are doing right now, we need to continue doing it right for us to be able to meet whatever target we are given. We need to continue to prevent crude oil theft, keep production high and maximise the inflows.” He also said it was necessary to increase the nation’s crude oil pro- duction through community en- gagement and ensure justice, equity and fairness. “To ramp up our production, it is definitely engagement with the communities. It is also important to understand that if Nigeria is not an equitable state, then we will never meet our full produc- tivity and we will always have the security challenges that we have as people fight and struggle for their own fair share.

“So being an equitable state, justice and fairness are ex- tremely important if we want to meet our full productivity, not just with respect to crude oil but with respect to farming, manufacturing and everything we need. It is all about fairness and justice. “We need to understand that without fairness and justice, there will be insecurity because people will fight for their exis- tence. It is fundamental. You can not force and hold people forever. It is equity, fairness and justice are the foundation of prosperity. “It looks as if the technology is in place from what we read in the press, we have the technol- ogy. But if technology tells you that your crude oil is stolen and you can not do anything about it, then your technology really does not help. Technology will tell you what you have, I have no doubt that we have the technol- ogy, it is not enough, you need justice, equity and fairness. “There could be more surveil- lance by security operatives. I believe that dealing with the problem fundamentally is the best approach. I do not believe using security is sustainable. Using security in the short times, but equity, fairness and justice is the medium and long- term solution,” Isong said.

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