Nigeria is increasing crude oil production and has set a target of August this year to meet its OPEC-assigned output quota, the country’s oil minister Timipre Sylva said June 24, reports SP Global.
Plunged to new lows
Nigerian crude oil output has plunged to new lows in recent weeks, hit by pipeline closures and maintenance at major fields.
The country has also struggled to meet its OPEC quota of 1.799 million b/d all through this year because of security challenges in the main oil-producing Niger Delta region.
Sylva said at a media briefing that Nigeria is working with producers including Shell, Chervon and ExxonMobil, to bring back production facilities online to increase output.
“We have given ourselves just about a month to ensure that we achieve at least some measurable milestones…The assurance I have from all the operators is that at least we can produce all of our OPEC quota by the end of August,” Sylva said.
“For us in Nigeria we are really at a low point, we are not able to meet our OPEC quota…We have given ourselves timeframe, we are focusing on security. We believe that by end of August we would have seen some improvements in security in the oil sector,” he said.
Africa’s largest oil producer has had to deal with a barrage of security, operational and technical problems at its key oil infrastructure since early-2021.
Crude and condensate production
Crude and condensate production in May fell 14% month on month to 1.279 million b/d, according to Nigerian Upstream Petroleum Regulatory Commission data.
That was the lowest in more than three decades, according to estimates from S&P Global.
Sylva also blamed the drop in Nigeria’s oil production largely on the wells that were shut-in during the outbreak of the Covid-19 pandemic when global demand for crude dipped significantly, and the inability of the country to bring them back .
According to Sylva, the government has initiated moves to reactivate shut-in wells and increase output.
OPEC to maintain output quota
With Nigeria struggling to meet its OPEC quota, Sylva said the situation would mean OPEC might not raise its output quota when it meets in August on the grounds that the global market is well supplied.
“I don’t think there will be surprises in OPEC in August.”
“Some people considered the prices to be a little bit on the high side and expect us to pump up a little bit more, but at this moment there is really little additional capacity that can be brought to the market,” the Nigerian oil minister stated. The Dated Brent oil benchmark has been in triple digits for much of 2022 amid tight supplies and strong demand for gasoline, jet and diesel.
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Source: SP Global
