The Organization of Petroleum Exporting Countries (OPEC) said on Monday that insufficient investments in the oil sector had constrained Nigeria’s and other OPEC member countries’ capacity to pump the volumes of crude oil agreed by the group.
OPEC also announced that Nigeria’s oil production fell by 40,000 barrels per day in April 2022, equating to 1.2 million barrels for the month under consideration.
OPEC said its oil output in April fell short of the increase envisaged under a deal with allies, citing figures from a Reuters survey, as declines in Libya and Nigeria offset supply increases by Saudi Arabia and other key producers.
“Output undershot the pledged hikes from October to March, with the exception of February, according to Reuters surveys, as many producers lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic,” OPEC stated.
It added, “As a result, the 10 OPEC members are pumping far less than called for under the deal. OPEC compliance with pledged cuts was 164 per cent, the survey found, versus 151 per cent in March.”
Nigeria is a long-standing member of OPEC, though the country has been failing to meet its crude oil production quota approved by the organisation for months now.
According to the study, OPEC pumped 28.58 million barrels per day in April, up 40,000 barrels per day from the previous month but still short of the 254,000 barrels per day increase required under the supply agreement.
As demand improves after the epidemic, OPEC and its allies, known as OPEC+, are gradually easing 2020 output curbs.
OPEC+ meets on Thursday, and despite the rise in oil prices following Russia’s invasion of Ukraine, it is poised to confirm a previously negotiated output raise.
The accord called for a 400,000bpd boost from all OPEC+ members in April, with around 254,000bpd shared among the ten OPEC producers covered by the arrangement.
The reduction in crude oil production from Nigeria and Libya was highlighted in the report.
It stated that the country with the greatest drop in output was Libya, which was losing more than 550,000bpd at one point in April due to blockades on fields and terminals. Libya is one of the OPEC members that is not required to restrict output.
“Nigerian output posted a 40,000bpd decline, the survey found, with lower exports than in March. Force majeure remains in place on the Bonny Light export stream,” OPEC stated.
It added, “These 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 100,000bpd came from Saudi Arabia, the survey found.”
Iraq increased output by 80,000 barrels per day (BPD), while the United Arab Emirates increased its quota by 40,000 barrels per day (BPD), and Kuwait’s output increased by 10,000 barrels per day (BPD).
According to the study, Iran was shipping more merchandise to China in 2022 and production surged in April, despite the fact that discussions on renewing its 2015 nuclear deal with world powers had failed to achieve an agreement.
According to OPEC, production in Venezuela, another exempted producer, increased somewhat. According to the report, production declined or did not increase in Angola, Equatorial Guinea, and Gabon due to a lack of capacity to produce more.
The survey observed that OPEC and allies, known as OPEC+, were unwinding record output cuts made in 2020 yet were struggling to achieve their planned monthly production increases.
