[By Sopuruchi Onwuka]
Nigeria’s crude oil output in December stood at 1.43 million barrels per day (mbd) as the country begins to compensate for past overproduction in compliance to shrewd quota enforcement by the coalition of major global petroleum producers.
A report of the nation’s crude oil production in the month submitted to the Organization of Petroleum Exporting Countries (OPEC) indicates production plunge by average of 70,000 barrels per day from 1.5 mbd posted by Nigeria in November.
Whereas the November production figures puts Nigeria in breach of its 1.495 mbd quota imposed by the coalition of OPEC and 10 major producing nations also called OPEC+, the December figures came in remediation of earlier overproduction.
With the 1.43 mbd production in December, Nigeria pumped 65,000 barrels per day less than its quota its assigned quota, pushing the country’s quota performance in the month to 119 percent.
However, The Oracle Today reports that Nigeria’s official production figures reported at the OPEC+ coalition are traditionally less than the nation’s actual wellhead output when volumes assigned to local refineries are accounted for.
Also, Nigeria produces nearly 700, 000 barrels of condensate and natural gas liquids (NGLs) per day, boosting the total liquids production figures reported by the Central Bank of Nigeria (CBN) in its monthly reports.
According to a survey of production numbers compiled in the Platts Commodity market guidance, crude oil supply by the OPEC+ coalition surged by 280,000 barrels per day in December despite call for remediation by countries that overproduced in the past.
Production surge led by Libya and other quota violators pushed OPEC+ production above targets to seven month high as demand projections posted positive outlook just before the second wave of coronavirus pandemic imposed economic gloom on major demand countries of the world.
According to production table Platts, OPEC’s 13 members pumped 25.43 mbd in December, up 220,000 b/d from November, while their nine non-OPEC partners, led by Russia, produced 12.74 mbd, up by 60,000 b/d.
Key producers still keep eye on competition for market share while also urging production restraint to protect oil prices from deleterious impact of raging coronavirus pandemic.
The coalition had planned to ease quota by 500,000 barrels per day this January in hope that the mass production of vaccines to arrest the spread of coronavirus would boost demand for oil.
Apart from Nigeria, many coalition members posted steady and varied production levels respectively.
Saudi Arabia, OPEC’s largest producer and de facto leader, kept its output steady in December at 9.01 mbd, but despite tanker tracking services observed steady rise in its crude exports.
With the ease of production agreed by the coalition, Saudi’s production quota would rise to 9.12 mbd from January even though the country has volunteered about 1.0 mbd extra cut in February and March.
On the other hand, Russia boosted its output to to 9.10 million b/d in December and become the largest producer in the OPEC+ group. The country’s December production was 110,000 b/d above its quota.
Russia’s output can only grow under the OPEC+ agreement to 9.12 mbd in January, 9.18 mbd in February and 9.25 mbd in March as it seeks to maintain some of its market share with the world’s key oil importers.
Production from Libya in December jolted the market with a jump from 250,000 barrels per day in November to 1.18 mbd following a peace deal among warring factions in the country.
Iran also boosted production to 2.04 mbd in December, its highest since March. But Venezuela is still in the woods following sanctions and investment drain.
It would be recalled that Libya, Iran and Venezuela are exempt from quotas under the OPEC+ quota deal.
Iraq also overpriced its quota by 50,000 barrels per day, pumping 3.85 mbd.
Although The UAE raised output higher in December it remained 20,000 b/d below its 2.59 mbd quota.
Fire at the Qua Iboe terminal meant that production was constrained, leading to Nigeria’s sudden high quota compliance since in 2017.
The Oracle Today reports that OPEC and its allies just completed a 7.7 mbd production cut accord from August to December.
The coalition eased its quota restrictions by 500,000 barrels per day to 7.2 mbd from this January. In February and March, Russia and Kazakhstan have been permitted small increases, while Saudi Arabia has said it will implement an extra 1.0 mbd cut below its quota. All other members will continue producing at January levels.
The OPEC+ coalition’s next formal meeting is March 4. A nine-country Joint Ministerial Monitoring Committee will meet Feb. 3.
The cuts are mostly determined from an October 2018 baseline production level, except for Saudi Arabia and Russia, which were given baselines of 11 mbd.