Nigeria, others fail to meet OPEC quota in April

By Akinola Ajibade

Nigeria, Libya and other African producers of crude oil have failed to meet the quote allocated to them by the Organisation of Petroleum Exporting Countries ( OPEC) in April this year.

OPEC has fixed April for Nigeria to meet its quota as part of efforts by the group to buoy prices of the product at the international market and further restore growth. 

Nigeria, which is one of the major producers of crudes  in  Africa is bedivilled by problems such. as crude oil theft and lack of investment in recent times.  The country , on the average, lost 350,000 to 400,000 barrels per day during the period under review according to the minister of state for Petroleum Resources, Timipre Sylva.

He said the country has, however, begun to ramp up its production level and very soon it would meet the 1.75 million barrels per day allocated to it by OPEC.

The country produced 1 .39 million barrels per day as against its April allocation of 1.735 million bpd by OPEC.

A recent survey carried out by Reuters for the month showed that the increase in OPEC’s oil output in April undershot the rise planned under a deal with allies, as declines in Libya and Nigeria offset supply increases by Saudi Arabia and other top producers.

OPEC pumped 28.58 million barrels per day (bpd) in April, up 40,000 bpd from the previous month and short of the 254,000 bpd increase called for under the supply deal.

OPEC and its allies, known as OPEC+, are slowly relaxing 2020 output cuts as demand recovers from the pandemic. OPEC+ meets on Thursday and would be expected to confirm a previously agreed output hike despite the surge in oil prices after Russia’s invasion of Ukraine.

The deal called for a 400,000 bpd increase in April from all OPEC+ members, of which about 254,000 bpd is shared by the 10 OPEC producers the agreement covers.

Output undershot the pledged hikes from October to March, with the exception of February as many producers lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic.

As a result, the 10 OPEC members are pumping far less than called for under the deal. OPEC compliance with pledged cuts was 164 percent the survey found, as against 151 percent in March.

But Nigeria’s underperformance was one of the highest hitting over 500 percent as against the 164 percent overall.

The biggest drop in output was in Libya, which at one point in April was losing more than 550,000 bpd from blockades on fields and terminals. Libya is one of the OPEC members exempt from making output cuts.

Nigerian output posted a 40,000 bpd decline month-on-month, the survey found, with lower exports than in March. Force majeure remains in place on the Bonny Light export stream.

The outages limited the increase in OPEC’s output as top producers followed through on the pledged hike in supply. The biggest rise in April of 100,000 bpd came from Saudi Arabia.

Iraq, which reported a month-on-month rise in exports, boosted output by 80,000 bpd. The United Arab Emirates followed through on its higher quota and added 40,000 bpd, while Kuwait’s output edged up by 10,000 bpd.

Iran, also exempt from making output cuts, has been shipping more to China in 2022 and production rose in April, even as talks on reviving its 2015 nuclear deal with world powers have yet to reach a deal.

Production in Venezuela, another exempt producer, edged higher. Production fell or did not increase in Angola, Equatorial Guinea and Gabon because of a lack of capacity to produce more.

The Reuters survey aims to track supply to the market. It is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from tanker trackers such as Petro-Logistics, as well as information provided by sources at oil companies, OPEC and consultants.

OPEC and allies, known as OPEC+, are unwinding record output cuts made in 2020 yet have been struggling to achieve their planned monthly production increases