Mon, July 22, 2024

OPEC Countries Gives Nigeria New Target

Wibest – OPEC Countries: A silhouette of an oil production worker.

OPEC Countries and its allies just allowed Nigeria’s plea to increase its oil production output under the organization’s quota. The new deal will grant Nigeria to produce 1.774 million barrels per day, over the OPEC’s original quota.

As agreed by OPEC countries in December 2018, Nigeria’s first target was just 1.685 million barrels per day. An unnamed delegate from OPEC confirmed the news to the press yesterday.

The news is not yet formally announced by the group. But last week, the Nigerian Minister of State for Petroleum Resources Timipre Sylva mentioned it in an interview.

The Nigerian Petroleum Ministry and OPEC denied commenting about the news this week.

According to a source, the decision was down to the coming on stream of the Egina offshore oil field. The said oil field is located 150 kilometers off the coast of Nigeria, and it belongs to Total.

Production in the Egina oil field started in January 2019. Officials say that the oil field was not a factor when the OPEC countries decided.

In the past, Nigeria has successfully maintained production, hitting the 1.695 million barrels per day mark. However, reports say that the country produced 1.866 million barrels per day in August.

The excess production overshot 400% in August, according to the International Energy Agency.

Nigeria has also considered 2.18 million barrels per day production quota. News says that the country wanted to trade the barrels around $57 to fund its state budget next year.

During the presentation of the 2020 budget by Nigerian President Muhammadu Buhari announced its plans for crude oil.

The president said that the 8.2 trillion Nigerian naira budget is a sign that the country wants to achieve its goals.

OPEC Shares

Wibest – OPEC Countries: Oil pump jacks over the sunset.

The Organization of Petroleum Exporting Countries agreed in December 2018 the share of production cuts of each country. But after the organization granted Nigeria’s request, it is unknown whether the shares of other OPEC countries will be affected.

Abuja only started to follow the OPEC rules this January as it received an exemption in the previous cuts. During that time, Nigeria was under militant attacks, reducing the country’s oil output production.

According to reports, the country also adds condensates into its oil production figures. The condensates are ultra-light variants of crude.

The Nigerian Department of Petroleum Resources said that the condensate production in 2017 reached 414,000 to 497,000 barrels per day.

Fall in Oil Output

OPEC countries’ oil output last month fell nearly 4 million barrels per day year on year. The EIA estimates that OPEC oil output will average 29.83 billion barrels per day this 2019.

The organization’s oil production averaged 28.23 million barrels per day in September, the lowest record since November 2003.

The production in OPEC countries and its allies such as Venezuela, Iran, and the United States fell last month.

US oil production is expected to pick up in the fourth quarter of the year. The EAI says the Gulf of Mexico and the Permian pipelines are starting to carry more barrels to the Texas Gulf coasts.

Experts believe that US oil production will finally hit 13 million barrels per day for the first time in December. In that case, it would be two months earlier than previous forecasts.

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