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Expected Nigeria’s Oil Production Rebound Falters as OPEC Output Falls in January
Emmanuel Addeh in Abuja
Nigeria’s oil production which began rebounding in November and December last year after a prolonged lull, stayed stagnant in January this year, a Reuters survey of activities in the month under review has shown.
It affected output by the Organisation of Petroleum Exporting Countries (OPEC) of which Nigeria is a key member combined with Iraqi exports which declined while Nigerian output did not recover further.
However, Gulf members maintained strong compliance with an OPEC+ deal on production cuts to support the market.
Nigeria has been unable to meet its OPEC oil production allocation for more than a year, but it began gradual recovery in the last two months, from its record low of about 900,000 barrels per day to roughly 1.23 million bpd in December. That figure, according to the survey did not increase in January.
The Nigerian Upstream Petroleum Regulatory Commissions (NUPRC), which releases the country’s official monthly production data had yet to do so at the weekend, according to THISDAY checks.
But during the month, OPEC pumped 28.87 million bpd, the survey found, down 50,000 bpd from December. In September, OPEC output hit its highest since 2020.
Output was significantly undershot targeted amounts because many producers – notably Nigeria and Angola – lack the capacity to pump at the agreed levels.
Output from OPEC and allies including Russia, known collectively as OPEC+, increased for most of 2022 as demand recovered. For November, with oil prices weakening, the group made its largest cut to production targets since the early days of the COVID-19 pandemic in 2020.
Its decision from November called for a 2 million bpd cut to the OPEC+ output target, of which about 1.27 million bpd was meant to come from the 10 participating OPEC countries. The same target currently applies.
With the decline in output this month, compliance with the agreement rose to 172 per cent of pledged cuts, according to the survey, against 161 per cent in December.
The 10 OPEC members required to cut production pumped 920,000 bpd below the group’s January target, the survey found. The shortfall in December was 780,000 bpd.
OPEC’s second-largest producer, Iraq, has exported fewer barrels last month from its southern fields, according to Eikon data and two companies that track the flows.
Nigerian output, which rebounded in December, held at similar levels in January, the survey found, leaving more to do if the country is to meet a target to lift output to 1.6 million bpd this quarter.