Emmanuel Addeh in Abuja with agency report
Oil output from the Organisation of Petroleum Exporting Countries (OPEC) rose in July to its highest since April 2020 as the group further eased production curbs under a pact with its allies and a top exporter Saudi Arabia phased out a voluntary supply cut.
OPEC countries pumped 26.72 million barrels per day (bpd), a Reuters survey found, up 610,000 barrels per day from June’s revised estimate, while output has risen every month since June 2020 apart from in February.
OPEC and allies, known as OPEC+, have been unwinding record output cuts agreed in April 2020, as demand and the economy recover, but with oil prices rising to a two and a half-year high, the group decided this month on further hikes from August.
The OPEC+ agreement allows for a 360,000 bpd increase in OPEC output in July against June, while Saudi Arabia had pledged to add 400,000 bpd as the final step in a plan to unwind a 1 million bpd voluntary cut it made in February, March and April.
The 13-member OPEC has slightly under-delivered on the expected month-on-month rise, the survey found as members’ adherence to pledged cuts declined. However, OPEC compliance with pledged cuts was 115 per cent, the survey found, against a revised 118 per cent in June.
The OPEC figures showed that Saudi Arabia delivered the biggest increase in July of 460,000 bpd, as it further unwound its voluntary cut and raised output as part of the July 1 OPEC+ boost.
The second-biggest came from the United Arab Emirates, which added 40,000 bpd in line with its new quota, while Kuwait and Nigeria each added 30,000 bpd, the survey found, as output in OPEC’s No. 2 producer Iraq edged up by 20,000 bpd.
Iran, which has managed to raise exports since the fourth quarter despite U.S. sanctions, has not provided a further boost this month, the survey found, while the country is exempt from OPEC supply curbs due to the sanctions.
The survey, which tracks supply to the market is based on shipping data provided by external sources.
Meanwhile, the federal government has revealed that it is seeking a higher reference oil production quota from the Organisation of Petroleum Exporting Countries (OPEC), following improving market indices and the growing negative impact of low production on the economy.
In April last year, OPEC, a coalition of 13 oil-producing nations, along with its allies known as OPEC+ activated its Declaration of Cooperation (DoC) document, following the twin impacts of the COVID-19 pandemic and the price war between Russia and Saudi Arabia on oil prices.
The curtailment saw Nigeria’s average 2 million barrels daily production fall drastically to about 1.3 million barrels per day, but has since then risen to 1.554 million bpd, excluding condensates.
But the Minister of State, Petroleum Resources, Timipre Sylva, in a meeting with OPEC Secretary General, Dr. Sanusi Barkindo in his office, at the NNPC Towers, Abuja, told his guest that Nigeria is now seeking a new reference volume.
While commending the OPEC helmsman, whom he described as a worthy ambassador of the country, the minister submitted that Nigeria would need his support to actualise the new reference volume on the basis of current economic realities.
Sylva stated that as a strong supporter OPEC, it was time for the international oil cartel to reciprocate Nigeria’s loyalty over the years by agreeing to increase the country’s oil production reference quota.
“I think we have shown enough good faith in this organisation and we are now saying that we need to have a better reference , not because we want it for the sake of it, but because as an economy, we really need to survive,” Sylva stated.
In his remarks, Barkindo acknowledged the progress being made in the oil and gas sector in Nigeria, especially in the Nigeria’s declaration of the “Decade of Gas.”
