Nigeria records drop in Crude oil production in 2006, says CBN
AGGREGATE crude oil production declined from an average of 2.53 million barrels per day in 2005 to 2.23 million barrels per day (mbp) in 2006, the Central Bank of Nigeria (CBN) has said.
The 2006 report of the bank, attributed the decline to the persistent disruption of oil operations especially the major Joint Venture Companies (JVCs) in the Niger Delta region.
CBN said that some new oil wells which started production and are contributing about 265,000 barrels of crude oil per day moderated the losses from the supply disruptions in the Niger Delta region.
"Aggregate export of crude oil, therefore, averaged 1.80 mbd compared with 2.08 mbd in 2005. The average spot price of Nigeria's reference crude, the Bonny Light, increased from $55.34 in 2005 to an average of $66.46 per barrel in 2006
The apex bank also reported that the manufacturing output declined by 1.5 per cent below
the level in the previous year while the average capacity utilisation rate fell from 54.8 per cent in 2005 to 53.3 per cent in 2006.
It attributed the poor performance of the sector during the period to worsening power supply situation in the country, which it said, further increased the cost of production, coupled with the influx of cheaper and sometimes sub-standard goods into the country.
"The cement sub-sector, however, improved substantially owing to the refurbishment of cement factories across the country, it said, adding that the activities of regulatory agencies like the National Food, Drugs Administration and Control (NAFDAC) and the Standards Organisation of Nigeria (SON) impacted on the sub-sector positively.
The CBN reported that the rate of expansion of economic activities slowed down from 6.5 per cent in 2005 to an estimated 5.6 per cent in 2006.
"It was, however, broad-based as all the sectors grew satisfactorily. The growth rate was also considered satisfactory, given that it was achieved amidst the challenges of low oil production and the energy crisis.
``Growth was, however, sustained by the favourable monetary and credit environment, which promoted increased private sector financing; the supportive environment provided by the public sector as well as the stability in the goods and foreign exchange markets; and the enhanced investment climate.
``Growth in the economy was driven mainly by agriculture, wholesale/retail trade, building and construction, and services, which grew by 7.2, 13.7, 12.1 and 8.9 per cent respectively. Industrial production, however, declined by 2.6 per cent, largely due to the fall in crude oil production,'' the apex bank said.
It said that the agricultural sector continued its recovery in 2006, benefiting from the various Federal Government Initiatives and favourable weather.
``The Industrial sector benefited from the continued government privatisation policy in 2006 and a focussed effort on providing the enabling environment for core investors to take off and grow,'' the bank said.
It said that the enabling environment was enhanced by the removal of legal hurdles associated with equity investment that hitherto hindered the inflow of foreign investment.
