2 October 2018

Nigeria Exports N7.3trn Crude Oil in Six Months

Nigeria's crude oil export appreciated by 17.38 per cent to N7.308 trillion in the first six months of 2018 from N6.226 trillion recorded in the last six months of 2017, according to data obtained from the National Bureau of Statistics (NBS).

The NBS, in its Second Quarter 2018 Foreign Trade Statistics, stated that first half 2018 crude oil export figure represented an increase of 52.25 per cent compared with an export of N4.8 trillion recorded in the same period of 2017.

Giving a breakdown of Nigeria's crude oil export on a quarter-on-quarter basis, the NBS report stated that in the first and second quarters of 2018, N3.58 trillion and N3.729 trillion worth of crude oil was exported respectively, compared to N2.97 trillion and N3.255 trillion recorded in the third and fourth quarter of 2017 respectively.

In the second quarter of 2018, the NBS report noted that India emerged the highest importer of Nigeria's crude oil, with the purchase of N635.25 billion, representing 87.9 per cent of its total import of N722.58 billion from Nigeria.

The Netherlands, Spain, South Africa, United States and Italy purchased Nigerian crude oil valued at N421.28 billion, N372.91 billion, N359.17 billion, N303.7 billion and N214.58 billion respectively.

Others in the top ten category are France, Sweden, Brazil and Thailand which imported Nigeria's crude oil worth N134.81 billion, N175.03 billion, N139.38 billion and N90.25 billion respectively.

The report showed the total value of Nigeria's merchandise trade was N6.569 trillion in the second quarter of 2018, which was a decline of 8.89 per cent compared to N7.211 trillion recorded in the first quarter of 2018, while it represented an increase of 14.56 per cent from N5.73 billion recorded in the second quarter of 2017.

The report indicated: "In the reviewing quarter, mineral products accounted for N4.275 trillion or 95.8 per cent of the total export from Nigeria. This category of export was dominated by crude oil exports which contributed N3.728 trillion or 83.5 per cent of total exports.

"The second largest component of export in second quarter 2018 was vegetable products, which recorded N65.45 billion or 1.5 per cent of the total export in the reviewing quarter.

"The value of crude oil exports recorded in second quarter 2018, N3.728 trillion, was 4.2 per cent higher than the value in first quarter 2018, which was N3.579 trillion and 53.7 per cent higher than the value in second quarter 2017, which was N2.425 trillion.

"Other oil products exports in second quarter 2018 stood at N516.32 billion, declining in the reviewing quarter by 3.6 per cent compared to N536.68 billion from first quarter 2018, and a 0.8 per cent growth from the value recorded in the second quarter of 2017, which was N512.41 billion."

The report noted that Nigeria exported most products to Europe, Asia and Africa, accounting for N1.849 trillion or 41.4 per cent, N1.284 trillion or 28.8 per cent and 639.3 or 14.3 per cent respectively.

However, the report added that within Africa, Nigeria exported goods valued at N265.1 billion to ECOWAS member states representing 41.5 per cent of the total export trade to Africa.

Market prospect

There are indications that the oil market would continue to be stable in the coming months, thus ensuring high revenue to Nigeria and other exporters, especially as the Organisation of Petroleum Exporting Countries (OPEC), has painted a bright prospect in its latest World Oil Outlook (WOO).

In launching the WOO, OPEC Secretary General, Mohammad SanusiBarkindo, said the past year had been a historic one for the organisation, as well as the global oil industry, with the historic 'Declaration of Cooperation,' "helping accelerate the return of balance to the global oil market, bringing more optimism to the industry, which in turn, has had a positive effect in the global economy and trade worldwide."

He added: "the importance of these recent developments, specifically in terms of helping achieve sustainable market stability, is clearly vital across all timeframes," which is evidenced in the analysis provided in the WOO 2018.

Highlight

The Outlook has it that: "All forms of energies will be required in the future; it is not about choosing one form of energy over another. Oil is expected to remain the fuel with the largest share in the energy mix throughout the forecast period to 2040. Total primary energy is set to expand by a robust 33 per cent between 2015 and 2040, driven predominantly by Developing countries, which see almost 95 per cent of the overall energy demand growth.

"Natural gas witnesses the largest demand growth in absolute terms, and renewables the largest growth in percentage terms. Long-term oil demand has been revised upward for the second consecutive year, with total demand at over 111.7 mb/d in 2040. Demand growth is driven by non-OECD regions, which see a huge increase of around 23 mb/d to 2040.

"There is no expectation for peak oil demand over the forecast period to 2040. Long-term demand growth comes mainly from the petrochemicals (4.5 mb/d), road transportation (4.1 mb/d) and aviation (2.7 mb/d) sectors; the total vehicle fleet - including passenger and commercial vehicles - is projected to increase to around 2.4 billion in 2040.

"The majority of the growth continues to be for conventional vehicles, but the long-term share of electric vehicles in the total fleet is projected to expand and reach a level of around 13 per cent in 2040, supported by falling battery costs and policy support. Non-OPEC liquids supply is forecast to increase by more than 9 mb/d between 2017 and 2027, with the major driver being US tight oil, but beyond this period non-OPEC supply is set to decline by around 4 mb/d.

"The demand for OPEC crude is projected to increase to around 40 mb/d in 2040, up from 32 mb/d in 2018. The share of OPEC crude in the global oil supply is estimated to increase from 34per cent in 2017 to 36 per cent in 2040. Global refinery additions are projected mainly in developing regions, led by the Asia-Pacific and the Middle East, but also Africa and Latin America.

Excess revenue

Nigeria 2018 was benchmarked at $51 per barrel and 2.3 million barrels per day. At the current market price, hovering at between $80 and $83 per barrel, the nation generates excess revenue of $32 per barrel of oil exported.

Meanwhile, experts, including Director General, Lagos Chamber of Commerce and Industry,Mr.Muda Yusuf, have called judicious deployment of resources in order to enable the nation fully reap the gains of the current stability in the global oil market.

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