Oil-producing states battle N1.3tn despite N2.8tn derivation allocation - Buzzyforum
Oil-producing states battle N1.3tn despite N2.8tn derivation allocation
Oil-producing states in Nigeria have received a total of N2.85tn in 13 per cent derivation revenue between 2022 and 2024, according to findings by The PUNCH.
The findings are based on analysis of data from each state’s budget implementation reports for the period under review.
The eight states that benefitted from the 13 per cent derivation revenue are Akwa Ibom, Bayelsa, Delta, Edo, Ondo, Rivers, Imo, and Abia.
Despite the increase in derivation revenue, The PUNCH observed that the states’ domestic debt burden remains at N1.34tn as of the third quarter of 2024, according to the latest data from the Debt Management Office.
The revenue, designed to compensate these states for oil exploration’s environmental and economic impact, has continued to rise, but questions linger over the management of these funds in the face of mounting liabilities.
The 13 per cent derivation fund is a constitutional provision ensuring that states producing crude oil receive additional allocations from the Federation Account.
The principle is meant to address the effects of oil extraction, foster local development, and reduce infrastructural deficits in these regions.
Nigeria’s crude oil production recorded a significant increase in 2024. Data obtained from the Nigerian Upstream Petroleum Regulatory Commission, an agency of the Federal Government, confirmed that Nigeria produced a total of 408,680,457 barrels of crude oil in 2024.
According to the NUPRC data, the country’s daily average crude production was 1.484 million barrels per day in December. This is below the Organisation of the Petroleum Exporting Countries’ quota allocated to Nigeria.
It was observed that the daily average production dropped from 1.485mbpd in November to 1.484mbpd in December. This is coming at a time when the country is making efforts to ramp up crude production to 2mbpd in the next year.
In 2024, the daily average production was unstable throughout the year. In January, crude production was 1.42mbpd. It dropped to 1.32mbpd in February and dipped further in March to 1.23mbpd.
The production was 1.28mpd, 1.25mpd and 1.27mpd in April, May and June respectively. From July, there was an upward swing as crude output returned to 1.30mbpd. The output was 1.35mbpd in August, 1.32mpd in September, and 1.33mbpd in October.
There was a significant improvement in November and December as the production rose to 1.48mbpd.
The PUNCH reports that there was no time the country met its OPEC quota in the entire 2024. However, the general increase in production in 2024 comes as the Federal Government intensifies efforts to combat oil theft and pipeline vandalism, which have long hindered the country’s ability to meet its production targets.
https://punchng.com/oil-producing-states-battle-n1-3tn-despite-n2-8tn-derivation-allocation/
The findings are based on analysis of data from each state’s budget implementation reports for the period under review.
The eight states that benefitted from the 13 per cent derivation revenue are Akwa Ibom, Bayelsa, Delta, Edo, Ondo, Rivers, Imo, and Abia.
Despite the increase in derivation revenue, The PUNCH observed that the states’ domestic debt burden remains at N1.34tn as of the third quarter of 2024, according to the latest data from the Debt Management Office.
The revenue, designed to compensate these states for oil exploration’s environmental and economic impact, has continued to rise, but questions linger over the management of these funds in the face of mounting liabilities.
The 13 per cent derivation fund is a constitutional provision ensuring that states producing crude oil receive additional allocations from the Federation Account.
The principle is meant to address the effects of oil extraction, foster local development, and reduce infrastructural deficits in these regions.
Nigeria’s crude oil production recorded a significant increase in 2024. Data obtained from the Nigerian Upstream Petroleum Regulatory Commission, an agency of the Federal Government, confirmed that Nigeria produced a total of 408,680,457 barrels of crude oil in 2024.
According to the NUPRC data, the country’s daily average crude production was 1.484 million barrels per day in December. This is below the Organisation of the Petroleum Exporting Countries’ quota allocated to Nigeria.
It was observed that the daily average production dropped from 1.485mbpd in November to 1.484mbpd in December. This is coming at a time when the country is making efforts to ramp up crude production to 2mbpd in the next year.
In 2024, the daily average production was unstable throughout the year. In January, crude production was 1.42mbpd. It dropped to 1.32mbpd in February and dipped further in March to 1.23mbpd.
The production was 1.28mpd, 1.25mpd and 1.27mpd in April, May and June respectively. From July, there was an upward swing as crude output returned to 1.30mbpd. The output was 1.35mbpd in August, 1.32mpd in September, and 1.33mbpd in October.
There was a significant improvement in November and December as the production rose to 1.48mbpd.
The PUNCH reports that there was no time the country met its OPEC quota in the entire 2024. However, the general increase in production in 2024 comes as the Federal Government intensifies efforts to combat oil theft and pipeline vandalism, which have long hindered the country’s ability to meet its production targets.
https://punchng.com/oil-producing-states-battle-n1-3tn-despite-n2-8tn-derivation-allocation/
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