Impact of declaration of cooperation on the Nigerian crude oil production

Abstract

The Nigerian economy has consistently suffered from global price shocks and its politics. And this shocks at many occasion has not been friendly with the Nigeria economy, since her over dependent on oil as the major source of revenue. A time-series model for the Nigerian monthly crude oil production is developed to examine the impact of Declaration of Cooperation (DoC). The data for this study are the monthly crude oil production spanning from January 1999 - December 2020. From the result, the impact parameter indicates that the DoC had a negative impact on the Nigerian crude oil production. That is, there’s about 35% level production reduction in Nigerian crude oil production after the introduction of DoC. The negative impact can further be seen in an all-time lowest drop in crude oil production (44,452,090 barrels) recorded in December 2020 after the introduction of DoC against a maximum crude oil production of 81,196,554 barrels recorded in October 2010 before the emergence of DoC. The intervention effect is described as immediate and gradual.