Growing Domestic Energy Demand Cuts Oil Available for Export

Nigeria’s crude oil that is available for export is declining as a result of the rapidly increasing domestic energy demand combined with an inability to boost output. According to Ildar Davletshin, an energy analyst at Renaissance Capital, oil production available for export declined by 0.5mb/d in 2005-2013 (equivalent to $20 billion of export revenue at $110/barrel Brent), while further shrinkage is expected as local demand continues to grow, assuming no change to the pattern of declining production. In a May 26 report, Ildar Davletshin also stated that the problem is further exacerbated by the fact that domestic consumption is mostly subsidized by the Federal Government, thus indirectly taking an additional toll on crude exports.