Nigeria’s crude production declined by 114,000 bpd in August – OPEC

….. predicts 4.2 mbpd growth for next year

By Akpobor Jirue, Abuja

Nigeria’s crude oil production declined by 114,000 barrel par day (bpd) to 1.27 mln bpd, in August, 2021. This is contained in the latest OPEC monthly report for September released on Monday.

The drop was reported despite increased production by other OPEC and OPEC+ countries.

The nation’s dwindling fortune came despite reports of increased oil production posted by other members of the Organisation of Petroleum Exporting Countries (OPEC).

According to the September OPEC report, members countries in August 2021 increased oil production by 0.15 million barrels per day (mbpd) to 26.76 (mbpd).

At the same time, the terms of the deal to cut oil production in August were fulfilled by 121% of the plan against 115% a month earlier.

The report revealed that in August, Saudi Arabia (the largest oil producer in OPEC) crude production amounted to 9.5 mbpd (an increase by almost 70,000 bpd against July). Iraq increased oil production by 90,000 bpd to 4.1 mbpd in August, the UAE – by 55,000 bpd to 2.8 mbpd, and Angola – by 43,000 bpd to 1.1 mbpd.

However, “Oil production declined in August in Nigeria – by 114,000 bpd to 1.27 mbpd, and in Congo – by 14,000 bpd to 249,000 bpd,” the report stated.

It will be recalled that OPEC+ countries have been increasing production since May.

The OPEC+ agreement to cut oil production involves 10 of the 13- member of the OPEC, as Iran, Libya, and Venezuela are exempt from restrictions. In August, the production of the parties to the deal amounted to 22.59 mbpd against 23.286 mbpd as stipulated by the terms.

The report explained that in August, the ten countries from OPEC were able to remove from the market a total of 4.1 mbpd to the base level in the agreement instead of 3.397 mbpd. Thus, the terms of the deal were fulfilled by 121%.

OPEC countries, under the current rules, are increasing oil production by 400,000 bpd per month, this plan will remain in force until October. The decision for November will be taken at the ministerial meeting on October 4.

Meanwhile, the oil cartel has predicted that global oil demand will grow by 4.2 mbpd on average next year as economic activity ramps up.

The report added that as vaccination rates rise, the Covid-19 pandemic is expected to be better managed and economic activities and mobility will firmly return to pre-Covid-19 levels.”

The 4.2 mbpd target is 0.9 mbd higher than its estimate last month, and takes global oil demand to 100.83 mbd on average next year, which is above the pre-pandemic levels.

The optimistic forecast comes as the OPEC cartel nations, which include Middle Eastern countries like Iraq, Iran and Saudi Arabia, and their allies, together known as OPEC+, are beginning to raise output to meet recovering demand.

OPEC+ nations slashed production last year to boost prices, which tumbled at the outset of the pandemic as economic activity was disrupted by lockdown measures.

The report, citing secondary sources, said OPEC’s output rose by 151,000 barrels per day during August to hit 26.76 mbd.

Big producers like Saudi Arabia, the United Arab Emirates and Iraq scaled up production, while production fell in Nigeria, the report stated.