Nigeria, Others, Lost N123trn Investments To Oil Price Crash- OPEC

The drop in global price of crude oil between 2015 and 2016 has cost Nigeria and other members of the Organization of the Petroleum Exporting Countries about $1tn in revenue due to the plunge n 2015 and 2016.

OPEC’s Secretary-General, Sanusi Barkindo, disclosed this at the 2021 Nigeria International Petroleum Summit in Abuja.

The $1trn revenue loss, based on the N410 official exchange rate of the Central Bank of Nigeria translates to about N410trn.

The OPEC Boss said no member country of OPEC was insulated from such a contraction in oil revenues during this cycle.

This, he noted had a severe impact on the resources available to the government to pursue its development programmes.

He said oil sector investments during the period also crashed by $300bn.

The $300bn, when converted to naira translates to about N123trn.

He said, “In terms of foregone revenues to OPEC member countries during this oil cycle, collectively about $1tn was lost as a consequence of the plunge in prices in 2015 and 2016.

“No member country of OPEC was insulated from such a contraction in oil revenues during this cycle. This had a severe impact on the resources available to the government to pursue its development programmes.

“Similarly, the 2020-21 recession was also caused by extraneous factors far beyond Nigeria’s borders.

“The devastating spread of COVID-19 severely impacted global oil demand and, again, developing economies were exposed.”

He also noted that investments were affected during the challenging periods in the sector, with exploration and production spending falling by an enormous 25 per cent in both 2015 and 2016.

He added, “There were significant job losses across the industry, as well as increasing financial and operational stresses for many companies.

“In fact, a record number of companies in our industry filed for bankruptcy.”

Barkindo observed that as the world economy contracted by 3.5 per cent year-over-year in 2020, global oil demand declined by 9.5 million barrels per day.

During the month of April 2020, Barkindo said oil demand dropped by a staggering 22 million bpd, describing it as a most challenging period as a result of the outbreak of COVID-19.