The Central Bank of Nigeria, CBN, has cited the vandalisation of crude oil pipelines as one of the reasons why Nigeria could not achieve its target of two million barrels per day oil production in 2024.
The CBN said the nation’s pipeline infrastructure are either vandalised or suffering from old age, which made it impossible for crude to be transported through them.
The year is about to wind down in few days and the country is still struggling to meet the target set by President Bola Ahmed Tinubu’s administration to raise the nation’s oil production higher, according to experts in the oil and gas sector.
As a result, the revenue target from crude oil has also been missed, according to the latest report by the CBN.
The apex bank disclosed that oil revenue plunged by 24.72 percent to N1.30 trillion compared to the N1.73 trillion recorded in the second quarter.
It said the figure fell significantly short of the quarterly target by 75.39 percent, largely due to frequent shutdowns caused by deteriorating pipelines and installations.
According to the apex bank,“Oil revenue fell by 24.72 percent to N1.30 trillion, relative to the level in Q2 2024, on account of lower receipts from petroleum profit tax and royalties.
“It was also 75.39 percent short of the quarterly target due to shut-ins, arising from ageing oil pipelines and installations.”
The report further noted that despite a modest rise in crude oil production to 1.33 million barrels per day (mbpd) from 1.27 mbpd in the previous quarter, theft, vandalism, and infrastructure deficits continued to stifle revenue growth.
The ageing infrastructure not only hindered production efficiency but also impaired Nigeria’s ability to meet its OPEC production quota.
Adding to domestic challenges, global market conditions exacerbated the situation.
The average spot price of Nigeria’s Bonny Light crude fell by 5.45 percent to $82.23 per barrel during the quarter, reflecting weaker global demand.
Similar price drops were reported for other crude benchmarks, including Brent and the OPEC Reference Basket.
Despite the setbacks in the oil sector, Nigeria’s economy grew by 3.46 percent in Q3 2024, up from 3.19 percent in the preceding quarter, the CBN report said.
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