Despite higher crude prices and allocation, as the Organisation of Petroleum Exporting Countries (OPEC) and its allies adjust monthly quota, Nigeria’s oil production remains below its monthly quota, according to the latest S&P Global Platts survey.
According to the survey, Nigeria dropped to 1.37 million barrels a day in October, 261,000 bpd below its OPEC+ quota, due to operational setbacks and sabotage from key pipelines.
The shortfalls from Nigeria and others have contributed to a tight oil market as global demand has recovered to near pre-pandemic levels, prompting intense criticism from the US and other consuming countries that have complained of high oil prices.
The Guardian had earlier reported that Nigeria’s production challenges appear unabated, as frequent pipeline sabotage is expected to see the country’s average crude loss surpass 200,000 barrels a day.
Platts survey showed that Bonny Light, Escravos and Forcados have all faced production issues in 2021, while output of other key grades such as Qua Iboe, Brass River, Agbami, Akpo and Egina have also remained consistently low this year.
Though Nigeria is expected to produce 1.66 million barrels a day of crude under the new OPEC+ agreement for December, higher than the current 1.4 million barrels per day being recorded by the country, there are concerns that the country can attain the volume despite assurances by the Minister of State for Petroleum, Timipre Sylva.
In the 2022 budget, the nation’s crude output stands at 1.88 million barrels per day (bpd), although its agreement with OPEC is roughly 1.47 million bpd.
The Independent Petroleum Producers Group (IPPG) had at the weekend, decried rising huge crude oil theft from its assets, a situation it described as threatening its over $10 billion investments in the country
The Chairman of the Group, Abdulrasaq Isa, who is also the Board Chairman at Waltersmith Petroman Oil Limited, disclosed that operators’ investments remain challenged by incidences of crude theft.
The Chairman said to address the trend, there is need to enhance security for strategic installations and assets across the region while a major offensive against crude oil thieves be reinvigorated.
In addition, he suggested execution of a private sector driven pipeline security initiative and deployment of surveillance technology like drone technology to identify Illegal crude theft points.
He also called for continuous engagement with regulators in the formulation of regulations and inclusion of IPPG members in the Petroleum Industry Act, PIA, Implementation Steering Committee and all-inclusive approach in the effective and timely implementation of the PIA.
In his remarks, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, acknowledged concerns about crude theft in the industry but assured that the government is taking serious steps to address them.
Komolafe, said a strong security web will be weaved around oil facilities to curb the incidence, adding that community engagement as stipulated in the Act would be rigorously pursued to achieve peace in host communities.
Though OPEC and its allies boosted crude oil production by 480,000 b/d in October, only half of the group’s members actually increased output last month as many in the coalition are struggling to pump as many barrels as they had promised, according to Platts survey.
OPEC’s 13 countries pumped 27.55 million b/d, up 260,000 b/d from September, while Russia and eight other partners added 13.66 million b/d, up 220,000 b/d.
The monthly rise was attributed mainly to the group’s largest oil producers Saudi Arabia, Russia, the UAE and Kuwait, which still have ample spare output capacity, as well as Kazakhstan, which completed heavy maintenance on a key field.
The 19 members with production quotas under the OPEC+ accord were a combined 600,000 b/d below their allocations for the month, bringing compliance to 113.21 per cent, the survey found.
– The Guardian