Nigeria earns $6.9bn from oil; economy grows by 5.1% in second quarter

By Babajide Komolafe

NIGERIA recorded $6.9 billion from crude oil exports in the second quarter of the year while the economy grew by 5.13 per cent. The Central Bank (CBN) in its economic report for the second quarter said the country exported 113.75 million barrels of oil during the quarter sold at an average price of $61.14 per barrel.

This translates to $6.955 billion earnings from oil and indicates an increase of 24 per cent when compared with $5.606 billion earned in the previous quarter. The increase was occasioned by 32.5 per cent rise in the price of the country’s crude oil-Bonny Light.

The report stated, “Nigeria’s crude oil production, including condensates and natural gas liquids was estimated at 1.70 million barrels per day (mbd) or 154.70 million barrels (mbd) during the second quarter of 2009, compared with 1.78 mbd or 160.20 mbd in the preceding quarter.

“This represented a decline of 4.5 per cent. The development was attributed to the continued disruption in oil production in the Niger Delta region as a result of militant activities. Crude oil export was estimated at 1.25 mbd or 113.75 million barrels in the review period, compared with 1.33 mbd or 121.03 million barrels in the preceding quarter.

“The development was attributed to the continued attacks on oil export facilities, including the Trans Ramos Pipeline facility belonging to the Shell Petroleum Development Company (SPDC). Deliveries to the refineries for domestic consumption remained at 0.445 mbd or 40.95 million barrels in the review quarter.

At an estimated average of US$61.14 per barrel, the price of Nigeria’s reference crude, the Bonny Light (37º API), rose by 32.5 per cent over the level in the preceding quarter. The average prices of other competing crudes namely, the West Texas Intermediate, the U.K Brent and the Forcados also rose by  45.5, 36.8 and 29.2 per cent to US$59.44, US$59.76 and US$60.32 per barrel, respectively.

“The average price of OPEC’s basket of eleven  crude streams also, rose by US$15.79 dollars to US$58.25 over the level in the preceding quarter. The increase in price was attributed to the high expectations of global economic recovery as well as the falling inventories in top oil consuming nation, the United States of America.”

During the quarter, the country’s total output as measured by the Gross Domestic Product (GDP) surpassed expectation rising by 5.13 percent. The growth, according to the apex bank, was driven by the non-oil sector.

The report  said, “Aggregate output growth in the economy measured by the gross domestic product (GDP) was estimated at 5.13 per cent in the second quarter of 2009, compared with 4.85 per cent in the preceding quarter. The projected growth was driven mainly by the non-oil sector, particularly agriculture which constituted 43.9 per cent of total GDP and contributed 2.4 percentage points to the growth in real GDP.”