CHAPTER ONE

INTRODUCTION

1.0

Introduction

An indebt study of the revenue from crude oil production in Nigeria cannot
be over-emphasized. This so because crude oil products serves as the major
source of revenue, economy and societal development of the country. The
analysis of crude oil production over the years are done using statistical
models. Statistics is the study of the collection, organization, analysis, and
interpretation of data. It deals with all aspects of this, including the planning
of data collection in terms of the design of surveys and experiments. All
sectors of the economy directly or indirectly depends on the profitability
and stability of the oil sector. Hence,
intuitively
Statisticians
will
continually play a pre-dominant role in Nigeria as the Nation strives to
restructure her dwindling economy.
The petroleum industry in Nigeria is the largest industry and main generator
of GDP in the West African nation which is also the continent's most
populous. Since the British discovered oil in the Niger Delta in the late
1950s, the oil industry has been marred by political and economic strife
largely due to a long history of corrupt military regimes and complicity
of multinational corporations, notably Royal Dutch Shell. Despite this, it
was not until the early 1990s that the situation was given international
attention, particularly following the execution by the Nigerian state of
playwright and activist Ken Saro-Wiwa, provoking the immediate
suspension of Nigeria from the Commonwealth of Nations. Nigeria is
identified by the international community and the firms in operation there
as a major concern with regard to human rights and environmental
degradation. The Nigerian government, oil corporations, and oil-dependent
Western countries have been criticized as too slow to implement reforms
aimed at aiding a desperately under-developed area and remediating the
unsustainable environmental degradation that petroleum extraction has
wrought.
1

Production and Exploration

As of 2000, oil and gas exports accounted for more than 98% of export
earnings and about 83% of federal government revenue, as well as
generating more than 40% of its GDP. It also provides 95% of foreign
exchange earnings, and about 65% of government budgetary revenues.
Nigeria's proven oil reserves are estimated by the U.S. United States Energy
Information Administration(EIA) at between 16 and 22 billion barrels
(3.5109 m), but other sources claim there could be as much as 35.3 billion
barrels (5.61109 m). Its reserves make Nigeria the tenth most petroleumrich nation, and by the far the most affluent in Africa. In mid-2001 its crude
oil production was averaging around 2.2 million barrels (350,000 m) per
day.
Nearly all of the country's primary reserves are concentrated in and around
the delta of the Niger River, but off-shore rigs are also prominent in the
well-endowed coastal region. Nigeria is one of the few major oil-producing
nations still capable of increasing its oil output. Unlike most of the other
OPEC countries, Nigeria is not projected to exceed peak production until at
least 2009. The reason for Nigeria's relative un-productivity is primarily
OPEC regulations on production to regulate prices on the international
market. More recently, production has been disrupted intermittently by the
protests of the Niger Delta's inhabitants, who feel they are being exploited.
Nigeria has a total of 159 oil fields and 1481 wells in operation according to
the Ministry of Petroleum Resources.[2] The most productive region of the
nation is the coastal Niger Delta Basin in the Niger Delta or "South-south"
region which encompasses 78 of the 159 oil fields. Most of Nigeria's oil
fields are small and scattered, and as of 1990, these small unproductive
fields accounted for 62.1% of all Nigerian production. This contrasts with
the sixteen largest fields which produced 37.9% of Nigeria's petroleum at
that time.[3] As a result of the numerous small fields, an extensive and welldeveloped pipeline network has been engineered to transport the crude.
Also due to the lack of highly productive fields, money from the jointly

operated (with the federal government) companies is constantly directed

towards petroleum exploration and production.
Nigeria's petroleum is classified mostly as "light" and "sweet", as the oil is
largely free of sulphur. Nigeria is the largest producer of sweet oil in OPEC.
This sweet oil is similar in composition to petroleum extracted from
the North Sea. This crude oil is known as "Bonny light". Names of other
Nigerian crudes, all of which are named according to export terminal, are
Qua Ibo, Escravos blend, Brass river, Forcados, and Pennington Anfan.
The U.S. remains the largest importer of Nigeria's crude oil, accounting for
40% of the country's total oil exports. Nigeria provides about 10% of
overall U.S. oil imports and ranks as the fifth-largest source for oil imports
in the U.S.
There are six petroleum exportation terminals in the country. Shell owns
two, while Mobil, Chevron, Texaco, and Agip own one each. Shell also
owns the Forcados Terminal, which is capable of storing 13 million barrels
(2,100,000 m) of crude oil in conjunction with the nearby Bonny Terminal.
Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State,
while Chevron owns the Escravos Terminal located in Delta State and has a
storage capacity of 3.6 million barrels (570,000 m). Agip operates the
Brass Terminal in Brass, a town 113 km southwest of Port Harcourt and has
a storage capacity of 3,558,000 barrels (565,700 m). Texaco operates the
Pennington Terminal.

1.1

Aims and Objectives of Study

1.

To fit a regression model to the crude oil variables.

2.

To study and describe the nature of correlation of the crude oil

variables.

3.

Goodness of fit test will be carried out on each developed

models.

1.2

Significance of Study

The significance of this study is that the result the developed models will
help NNPC to know the level of dependent of projected revenue on crude oil
production on actual revenue and this will help in decision making as regard
crude oil production.

1.3

Literature Review

Ayotamuno (1994) in a journal on Bioremediation of a crude oil polluted

agricultural-soil in Port Harcourt noted that A combination of treatments,
consisting of the application of fertilizers and oxygen exposure, was
evaluated in situ during a period of six weeks. Conditions of a major spill
were simulated by sprinkling crude oil on experimental cells containing
agricultural soil. The remedial treatments were then applied and the soil
characteristics analyzed after set periods. Soil physicochemical parameters,
such as moisture content, pH value, electrical conductivity as well as
organic-carbon and total-nitrogen contents, showed distinct variations with
time. The total heterotrophic-bacteria (THB) count in all the treatment cells
increased with time. The control cell, O (which was not treated) indicated
no signs of remediation within the study period. The hydrocarbon losses
(5095%) experienced in the five other treatment-cells revealed the
effectiveness in degrading the hydrocarbon contaminant. The results of this
study indicate that the application of increased concentrations of nutrients
(by the application of fertilizers) lead to greater rates of biodegradation of
petroleum-polluted agricultural soils.
Okoh (1995) in a journal on Biodegradation of Bonny light crude oil
pointed that in an effort at developing an active indigenous bacterial
consortium that could be of relevance in bioremediation of petroleum
contaminated systems in Nigeria, four hydrocarbon degrading bacteria
strains were isolated. Partial sequencing of the 16S rDNA of the isolates
suggests that they are all strains of Pseudomonas aeruginosa. Axenic
4

cultures of the isolates biodegraded Bonny light crude oil in soil

microcosm. Amount of crude oil biodegraded in 15 days ranged
significantly
Hamilton (1996) in a book on understanding Crude oil prices examined the
factors responsible for changes in crude oil prices. The paper reviews the
statistical behavior of oil prices, relates these to the predictions of theory,
and looks in detail at key features of petroleum demand and supply. Topics
discussed include the role of commodity speculation, OPEC, and resource
depletion. The paper concludes that although scarcity rent made a negligible
contribution to the price of oil in 1997, it could now begin to play a role.
Ezeronye (1997) in write-up on Petroleum degrading potentials was of the
view that the ability of three bacterial isolates (Bacillus spp, Micrococcus
spp and Proteus spp.) and some fungal species (Penicillin spp., Aspergillus
spp. and Rhizopus spp.) isolated from two rivers and refinery effluent to
degrade two Nigerian crude oils was studied. The results showed changes
in pH, optical density and total viable count for the bacterial isolates after a
17-day period. There was an increase in biomass for the fungal isolates after
a 35-day period. It was observed that these organisms were able to utilize
and degrade the crude oil constituents, with bacterial isolates showing
increase in cell number and optical density as pH decreases. Single cultures
were observed to be better crude oil degraders than the mixed cultures
(bacteria or fungi). It was also observed that oil degraders could be isolated
from a non-oil polluted environment, although those from oil-polluted
environments have higher degradation potentials.
Nashawi (1999) in his write-up on forecasting world crude oil production
using multicyclic hubbert models wrote that the year 2008 has witnessed
unprecedented fluctuations in the oil prices. During the first three-quarters,
the oil price abruptly increased to $140/bbl, a level that has never been
reached before; then because of the global economic crisis, the price
dramatically plunged to less than $50/bbl by the end of the year losing more
than 64% of the maximum price in less than three months period. The
supply of crude oil to the international market oscillated to follow suite
according to the law of supply and demand. This behavior affected oil
5

production in all exporting countries. Nonetheless, the demand for crude oil
in some developing countries, such as China and India, has increased in the
past few years because of the rapid growth in the transportation sector in
addition to the absence of viable economic alternatives for fossil fuel. The
rapid growth in fuel demand has forced the policy makers worldwide to
include uninterrupted crude oil supply as a vital priority in their economic
and strategic planning.
Schatz () in his article on Pirate capitalization and the inert economy of
Nigeria noted that since the great surge in oil revenues during 1973-1974,
there has reacted passively to the increased revenues, but which has had no
growth-generating power of its own outside of the crude oil-producing
sector. The other-than-oil economy has not had any internal engine of
growth, In support of this thesis, he made the following points:
1. The growth of Nigerias economy, apart from oil, has been strikingly
small, given the huge increase in oil revenues.
2. Even the limited growth rate has been dwindling
3. The pattern of the growth that has been achieved suggests a passive
response to an exogenous stimulus.
Frynas (2000) in an article on a new scramble for African oil noted that it
has been suggested that Africa is experiencing a New Scramble thanks
primarily to its oil and gas wealth, with the United States and the Peoples
Republic of China actively competing for access to Africas resources. This
article aims to scrutinize the claim that Africa is facing a New Scramble,
analyzing the nature of the economic and political changes at work, the
importance of Africas oil, and the political and economic forces behind the
new oil rush. The article starts with an overview of the phenomenon labeled
by some as the New Scramble. The main body of the article evaluates the
existence of a New Scramble from three subject perspectives: history,
international relations, and business studies. Finally, by analyzing the likely
impact on the economies of oil-producing states, he considers whether we
should dismay or rejoice over the New Scramble for Africa. He concludes
that the existence of a New Scramble or a USChinese race for Africa
should be treated with some caution and that the use of terms such as
6

scramble and race is perhaps misleading, while the economic impact of

oil investments is likely to be bleak.
Manby (2000) in his article on the role and responsibility of oil
multinationals in Nigeria was of the view that the role played by the oil
multinationals in Nigeria has received increasing attention in recent years as
protest against oil production has grown, and with it the repressive response
of the Nigerian government. Shell in particular, the largest producer in
Nigeria, has faced a barrage of criticism over its activities in the country.
This criticism reached a height in 1994 and 1995, when the government
suppressed anti-Shell protests by the Movement for the Survival of the
Ogoni People (MOSOP), executing MOSOP leader and internationally
known author Ken Saro-Wiwa and eight other Ogoni activists in November
1995. While the Ogoni crisis is no longer in the headlines, and while the
June 1998 death of General Sani Abacha ended a period of unprecedented
repression in Nigeria--allowing elections that have led to the installation of
the first civilian government in 16 years--protest and repression in Nigeria's
oil-producing regions have, if anything, increased.
Pinto (2003) in an article on Nigeria during and after the oil boom,
compared Nigeria with Indonesia. He noted that Nigeria and Indonesia
provide an interesting contrast with regard to performance and policy during
and after the oil boom. Roughly a decade after the first oil shock, Nigeria is
faced with several economic problems including a serious decline in its
agricultural sector and a deteriorating external debt situation. While some
decline in the nonoil traded goods sector reflects efficient adjustment to the
oil boom, policy with regard to public expenditure, exchange rates, pricing,
and the trade regime could exacerbate such decline and impede readjustment
as the boom subsides. The links between oil prices, deficits, inflation, and
real exchange rate appreciation are analyzed and Nigerian and Indonesian
fiscal and exchange rate and agricultural and foreign borrowing strategies
are compared. It is concluded that with the exception of cuts in the deficit
since 1984, Nigerian policy following the boom has not been conducive to
adjustment to the current period of low oil prices and high real interest rates.
Corrective measure and policy options are discussed. A postscript gives
post-September 1986 policy changes.
7

Ayadi (2005) in an article on OPEC review emphasized on the oil price

fluctuation and the Nigerian economy pointed out that the single most
important issue confronting a growing number of world economies today is
the price of oil and its attendant consequences on economic output. Several
studies have taken the approach of Hamilton (1983) in investigating the
effect of oil price shocks on levels of gross domestic product. The focus of
this paper is primarily on the relationship between oil price changes and
economic development via industrial production. A vector auto regression
model is employed on some macroeconomic variables from 1980 through
2004. The results indicate that oil price changes affect real exchange rates,
which, in turn, affect industrial production. However, this indirect effect of
oil prices on industrial production is not statistically significant. Therefore,
the implication of the results presented in this paper is that an increase in oil
prices does not lead to an increase in industrial production in Nigeria.
Chen (2006) in an article on Chinese National oil companies and human
rights stated that China's efforts to secure foreign oil and natural gas to meet
its growing energy demand are contributing to massive human rights
violations in Sudan and Burma. These human rights conflicts, significantly
influenced by abundant oil and gas reserves, have strained U.S.-China
relations and complicated international efforts to create a more effective
architecture to address both rights crises and conflict management over
energy resources. The United States and its allies should not only engage
Beijing but also bring Chinese national oil companies into the international
energy market as stakeholders. Failure to address these matters could
encourage other parties seeking scarce energy supplies to take similar
compromises on human rights as they court questionable oil regimes, a
development that would be detrimental to international peace and security.
Ojinnaka (2006) in his book on chemical reclamation of crude oil inundated
soils from the Niger Delta, Nigeria stated that crude oil-inundated soils were
collected from the Agbada oil field in the Niger Delta region of Nigeria 2
months after the recorded incidence of oil spillage. The soils were taken on
the second day of reconnaissance from three replicate quadrats, at surface
(015 cm) and subsurface (1530 cm) depths, using the grid sampling
technique. The total extractable hydrocarbon content (THC) of the polluted
8

soils ranged from 1.24102 to 3.86104 mg/kg at surface and subsurface

depths (no overlap in standard errors at a 95% confidence level).
Greenhouse trials for possible reclamation were later carried out using 10
100 g of (NH4)2SO4, KH2PO4 and KCl (NPK) fertilizer as nutrient
supplements. Nitrogen as NO3-N and potassium were optimally enhanced at
2% (w/w) and 3% (w/w) of the NPK supplementation, respectively.
Phosphorus, which was inherently more enhanced in the soils than the other
nutrients, maintained the same level of impact after treatment with 20 g of
NPK fertilizer. Total organic carbon (%TOC), total organic matter (%TOM),
pH, and percentage moisture content all provided evidence of enhanced
mineralization in the fertilizer-treated soils. If reclamation of the crude oilinundated soils is construed as the return to normal levels of metabolic
activities of the soils, then the application of the inorganic fertilizers at such
prescribed levels would duly accelerate the remediation process. However,
this was limited to levels of pollution empirically defined by such THC
values obtained in the study.

CHAPTER TWO
DATA COLLECTION

2.1

Method of Data Collection

The method of data collection used is for this research is the method of
registration of activities of the Nigeria National Petroleum Corporation
(NNPC), Headquarter Lagos (Annex), Ikoyi as reported to the Central Bank
of Nigeria (CBN). The data collected could be classified as a primary source
of data.
2.2

Limitation of Data Collection

The data collected is restricted to the cost of crude oil (US$), Domestic
production (million barrel/day) and Exported crude oil (million barrel/day)
in 2012. The variables are defined below
MONTHS

Price of Crude
Oil/Barrel(US$)

Yi

Domestic
Production
(mbd)

January

94.26

2.17

1.72

February

98.15

2.06

1.63

March

103.73

2.06

1.61

April

116.73

1.96

1.51

May

126.57

2.05

1.6

June

138.74

2.02

1.57

July

141.86

2.13

1.68

August

115.84

2.11

1.66

September

103.83

2.17

1.72

October

75.31

2.26

1.81

November

54.31

1.81

1.69

X1

10

Crude
Oil
Export(mbd)

X2

December

2.3

44.36

2.04

1.59

About Nigeria National Petroleum Corporation (NNPC)

NNPC comprises of

2.3.1 Royal Dutch Shell (British/Dutch)

Shell Petroleum Development Company of Nigeria Limited (SPDC), usually
known simply as Shell Nigeria: A joint venture operated by Shell accounts
for 50% of Nigerian's total oil production (899,000 bbl/d (142,900 m3/d) in
1997) from more than eighty oil fields. The joint venture is composed of
NNPC (55%), Shell (30%), TotalFinaElf (10%) and Agip (5%) and operates
largely onshore on dry land or in the mangrove swamp in the Niger Delta.
"The company has more than 100 producing oil fields, and a network of
more than 6,000 kilometres of pipelines, flowing through 87 flow stations.
SPDC operates 2 coastal oil export terminals". The Shell joint venture
produces about 50% of Nigeria's total crude. Shell Nigeria owns concessions
on four companies, they are: Shell Petroleum Development
Company (SPDC), Shell Nigeria Exploration and Production Company
(SNEPCO), Shell Nigeria Gas (SNG), Shell Nigeria Oil Products (SNOP),
as well as holding a major stake in Nigeria Liquified Natural Gas (NLNG).
Shell formerly operated along side British Petroleum as Shell-BP, but BP has
since sold all of its Nigerian concessions. Most of Shell's operations in
Nigeria are conducted through the Shell Petroleum Development Company
(SPDC).

2.3.2 Chevron (American)

11

Chevron Nigeria Limited (CNL): A joint venture between NNPC (60%) and
Chevron (40%) has in the past been the second largest producer
(approximately 400,000 bbl/d (64,000 m3/d)), with fields located in the
Warri region west of the Niger river and offshore in shallow water. It is
reported to aim to increase production to 600,000 bbl/d (95,000 m3/d).
2.3.3 Exxon-Mobil (American)
Mobil Producing Nigeria Unlimited (MPNU): A joint venture between the
NNPC (60%) and Exxon-Mobil (40%) operates in shallow water off Akwa
Ibom state in the southeastern delta and averaged production of 632,000
bbl/d (100,500 m3/d) in 1997, making it the second largest producer, as
against 543,000 pbd in 1996. Mobil also holds a 50% interest in a
Production Sharing Contract for a deep water block further offshore, and is
reported to plan to increase output to 900,000 bbl/d (140,000 m 3/d) by 2000.
Oil industry sources indicate that Mobil is likely to overtake Shell as the
largest producer in Nigeria within the next five years, if current trends
continue, mainly due to its offshore base allowing it refuge from the strife
Shell has experienced onshore. It is headquartered in Eket and operates in
Nigeria under the subsidiary of Mobil Producing Nigeria (MPN).
2.3.4 Agip (Italian)
Nigerian Agip Oil Company Limited (NAOC): A joint venture operated by
Agip
and
owned
by
the
NNPC
(60%),
Agip
(20%)
3
and ConocoPhillips (20%) produces 150,000 bbl/d (24,000 m /d) mostly
from small onshore fields.
2.3.5 Total (French)
Total Petroleum Nigeria Limited (TPNL): A joint venture between NNPC
(60%) and Elf (now Total) produced approximately 125,000 bbl/d
(19,900 m3/d) during 1997, both on and offshore. Elf and Mobil are in

12

dispute over operational control of an offshore field with a production

capacity of 90,000 bbl/d (14,000 m3/d).

2.3.6 Texaco (now merged with Chevron)

NNPC Texaco-Chevron Joint Venture (formerly Texaco Overseas Petroleum
Company of Nigeria Unlimited): A joint venture operated by Texaco and
owned by NNPC (60%), Texaco (20%) and Chevron (20%) currently
produces about 60,000 bbl/d (9,500 m3/d) from five offshore fields.

CHAPTER THREE
13

ANALYSIS OF DATA

3.1

Data Analysis

The data for this research to be analyzed is presented in section 2.3 (Data
Presentation) and SPSS software will also be used to do analysis. In the data
analysis the variables for the analysis in millions of naira are actual revenue
from crude oil production, Projected revenue from crude oil production and
Actual crude oil (petroleum) domestic consumption and denoted as Y, X 1
and X2 respectively.
With the aid of SPSS the following are the means, standard deviation and
variables of the crude oil variables
Descriptive Statistics

Price
Domestic_Prod
Export

Mean
101.1408
2.0700
1.6492

Std. Deviation
30.64774
.11481
.08096

Table of Correlation

14

N
12
12
12

Correlations
Pearson
Correlation
Sig. (1-tailed)

3.2

Price
Domestic_Prod
Export
Price
Domestic_Prod
Export
Price
Domestic_Prod
Export

Price
1.000
.193
-.294
.
.274
.177
12
12
12

Domestic_Prod
.193
1.000
.577
.274
.
.025
12
12
12

Export
-.294
.577
1.000
.177
.025
.
12
12
12

Model and Parameters Estimation

The regression model is multiple linear as given below

Yi = 0 + 1x1i + 2x2i + ei
Interpretation of Parameters

Yi = observation on the dependent variable (y) in the ith trial

x1i = value of the first independent variable (x1) in the ith trial
x2i = value of the second independent variable (x2) in the ith trial
E (ei ) 0, Var (ei ) 2 , E (ei e j ) 0, i j
The last condition on the error ( e ) term indicates that the error terms are
uncorrelated.
The table below is SPSS output result after imputing the data for Y, X 1 and
X2
Regression Coefficients
Coefficientsa

15

Model

Unstandardized
Coefficients

Std. Error
(Constant)

180.144

Standardized
Coefficients

188.348

Domestic_Prod 145.333
Export
-230.324
a. Dependent Variable: Price

92.173
130.720

.544
-.608

Sig.

.956

.364

95.0%
Confidence
Interval for
Lower
Upper
Bound
Bound
-245.928
606.216

1.577
-1.762

.149
.112

-63.176
-526.034

353.842
65.386

Yi = 180.144 + 145.333X1i - 230.324X2i

a.

Confident Interval (CI) for model parameters are

i.
0 = 180.144
CI for 0 = -245.928 0* 606.216
ii.

1 = 145.333
CI for 1 = -63.176 1* 353.842

iii.

2 = -230.324
CI for 2 = -526.034 2* 65.386

at 95% confident interval.

b.

Goodness of Fit

Goodness of fit test of the regression model

Yi = 180.144 + 145.333X1i - 230.324X2i
H0: 1 = 0 (The regression coefficient are thesame)
H1: 1 0 (The regression coefficient are not thesame)
The Analysis of Variance (ANOVA) table is a result from SPSS and will be
used to test the hypothesis.
ANOVA Table
16

ANOVAa
Model
Residual

Sum of Squares df
2937.159
2
7394.967
9

Total

10332.126

Regression
1

Mean Square
1468.579
821.663

F
1.787

Sig.
.222b

11

a. Dependent Variable: Price

b. Predictors: (Constant), Export, Domestic_Prod

Decision Rule
Reject H0 if F-Ratio > F,(2,9)df and accept if otherwise at 5% level of
significance.
F,(2,9)df = 4.26
Decision
Since F-Ratio > F,(2,9)df i.e.1.787 > 4.26
We accept H0 and conclude that the regression coefficients are the same.
Ci

Correlation between Y and X1 (Y,X1)

From the table of correlation above the correlation between relationship

between Y (price of crude oil) and X1 (domestic production of crude oil) YX1
= 0.193
Cii

Correlation between Y and X1 (Y,X2)

From the table of correlation above the correlation between relationship

between Y (price of crude oil) and X2 (Export of crude oil), YX2 = -0.294

Ciii

Correlation between Y and X1 (X1,X2)

From the table of correlation above the correlation between relationship

between X1 (domestic production of crude oil) and X 2 (Export of crude oil),
X1,X2 = 0.577

17

d.

Coefficient of Multiple Determination

Model R

R
Adjusted Std. Error Change Statistics
Square R Square of
the R
Square F Change df1 df2 Sig. F Change
Estimate
Change
1
.533a .284
.125
28.66467
.284
1.787
2
9
.222
a. Predictors: (Constant), Export, Domestic_Prod
b. Dependent Variable: Price

An R2-value of .284 1 shows the efficiency of the model.

d. Graphical Description

18

19

20

CHAPTER FOUR
SUMMARY, CONCLUSION AND RECOMMENDATION

4.1

Summary

This project focuses on the effect and strength of the domestic production
and exportation of crude oil on the price. A raw data showing the price of
crude oil, the corresponding domestic quantity produced and quantity
exported in 2012 was collected. Analysis of the data was run using SPSS
V21

4.2

Conclusion

From various tests carried out on the data, a multiple linear regression model
Yi = 180.144 + 145.333X1i - 230.324X2i was developed showing that during
the year in view, exported crude oil negatively affected the price.
The correlation of the variables are positive except for the price and
exported crude that is negative. Conclusively, in order to boost the actual
revenue from domestic consumption of crude oil in Nigeria, the Federal
Government should increase its allocation, by giving a large percentage of
the total production of crude oil to it and this reduces the percentage of the
actual revenue from the exported crude oil.

4.3

Recommendation

In view of the conclusion drawn, the Federal Government of Nigeria should

put in more efforts to alleviate the suffering of the masses. This can be
achieved by adopting the following measures:
1) The Federal Government should work on crude oil production.
This will help many Nigerians fall above the poverty level.

21

2) Government should employ more or encourage Nigerians to

work in the petroleum industries, thereby, helping the economy
to improve.
3) Exportation of crude oil should be limited, (i.e. larger share of
its should be reformed in the country).
4) The Federal Government should privatization the petroleum
industries so as to increase job opportunity.

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Hanson Baldwin (1959). Oil Strategy in World War II", American

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Press Boston.

APPENDIX
Data Presentation
The data for this research is presented in the table below:
MONTHS

Price of Crude
Oil/Barrel(US$)

Domestic
Production
(mbd)

Crude
Oil
Export(mbd)

January

94.26

2.17

1.72

February

98.15

2.06

1.63

March

103.73

2.06

1.61

April

116.73

1.96

1.51

May

126.57

2.05

1.6

June

138.74

2.02

1.57

July

141.86

2.13

1.68

August

115.84

2.11

1.66

September

103.83

2.17

1.72

October

75.31

2.26

1.81

November

54.31

1.81

1.69

December

44.36

2.04

1.59

24