Nigeria has bounced back by taking the lead as Africa’s ‘biggest’ oil producer, by increasing its crude oil production by 172,000 bpd to 1,186 million barrels per day(bpd) in November 2022, for the first time, since May 2022, when its production output dropped to 1.02 million bpd, having been hit by massive crude theft and organised criminality allegedly involving top government officials/individuals and security agencies.
The Organisation of Petroleum Exporting Countries, OPEC’s latest Monthly Oil Market (MOMR) Report for November 2022, obtained on Tuesday by EnergyDay, showed that Nigeria has therefore displaced Angola, Algeria, and Libya to occupy the top spot position in November 2022, despite battling with persistent sundry issues that have repeatedly denied the country opportunity of meeting its quota for several months.
The OPEC data however showed that Nigeria’s 1.186 million bpd despite being the biggest in the continent is still a distance far from the average of 1,472 million bpd in November 2020, recorded in a covid year, and 1,420,000 in November 2021 output level achieved by the country.
Nigeria’s oil production stood at 1,186 million bpd, when compared with 1.014mbpd recorded in October 2022.
EnergyDay’s analysis showed that Nigeria added 172,000 bpd in November, to return to the top of the table as Africa’s biggest producer, while Algeria dropped by 49,000 bpd and Angola gained by a paltry 37,000 bpd (direct source).
OPEC’s report for the month under review, revealed that Nigeria’s oil production increased to 1,186million barrels per day(bpd) as Algeria drilled 1.021million bpd, Angola produced 1.088 million bpd, while Libya’s output level was zero due to crisis in that country, based on direct communication.
Interestingly, Nigeria overtook Angola and other OPEC members in the continent, based on both direct communication and secondary sources’ data.
EnergyDay’s check also established that Nigerian National Petroleum Company Limited (NNPCL) Limited has attributed the output gains achieved so far to the return of Forcados and partial restoration of the Trans Niger Pipeline (TNP) significantly contributed by the collaboration of the national oil company with the security agencies, regulators, oil producing communities, and other stakeholders.
On the economic front, OPEC stated that Nigeria’s economic outlook has been challenged by factors such as natural disasters that have hampered productivity. The report said that the country’s economy expanded by 2.3% y-o-y in 3Q22, decelerating from the growth of 3.5% y-o-y in 2Q22, marking the eighth consecutive quarter of growth, yet the slowest rate since 1Q21.
OPEC also noted the 4Q22 data indicates a sharp rise in inflation accompanied by higher interest rates, slowing private sector momentum, and a slowdown in household consumption.
The inflation rate accelerated to its highest level in 17 years in October as localized food, and fuel shortages increased the headline inflation rate to 21.1% y-o-y from 20.8% y-o-y in September.
According to the report, OPEC’s output for November fell by 744,000 bpd from October to an average 28.83 million bpd, led by top exporters Saudi Arabia and other large producers such as Iraq. OPEC compiles the figures using secondary sources
The OPEC’s report also showed that average production dropped in the period under review after the wider OPEC+ alliance pledged steep output cuts to support the market amid the worsening economic outlook and weakening prices.
For November, with prices weakening, the oil cartel agreed to a 2 million bpd reduction in their output target, which is about the largest since the early days of the pandemic in 2020. OPEC’s share of the cut is 1.27 million bpd.
The global forecast by OPEC was steady from November, after a series of downgrades, as the report showed that the world oil demand in 2023 will rise by 2.25 million barrels per day (bpd), or about 2.3%.
This global oil demand growth in 202, according to OPEC due to the potential economic upside coming from a relaxation of China’s zero-COVID policies, which this year have pushed the country’s oil use into contraction for the first time in years.
OPEC said, “Although global economic uncertainties are high and growth risks in key economies remain tilted to the downside, upside factors that may counterbalance current and upcoming challenges have emerged as well.
“A resolution of the geopolitical conflict in Eastern Europe and a relaxation of China’s zero-COVID policy could provide some upside potential,” the report said in a separate section.
OPEC in the report specifically pushed up its 2022 economic growth forecast to 2.8% and left 2023 steady at 2.5%. Sources of the upside, according to the report include the expected relaxation of China’s COVID policy, and commodity price weakness.
“Upside potential, or at least counterbalancing factors, may come from the U.S. Federal Reserve successfully managing a soft landing in the United States, as well as from a continued easing of commodity prices and a resolution of the tensions in Eastern Europe,” the OPEC report noted..