The Monthly Oil Market Report, MOMR, of the Organization of Petroleum Exporting Countries, OPEC, published yesterday, shows that Nigeria’s oil output is still below its quota as the country’s rig count dropped further to six.
With oil prices edging closer to $90 a barrel, Nigeria is failing to ramp up production capacity to take advantage of higher prices.
The MOMR reveals that Nigeria’s production in December, based on direct communication, was lower at 1.19 million barrels per day (mbpd) compared to 1.27mbpd recorded in November.
Nigeria was expected to produce 1.66 million barrels a day of crude under the OPEC+ agreement for December. Under the new plan, Nigeria is expected to pump 1.7 million barrels-a-day in February. However, lingering challenges may undermine the country’s capacity to meet the target, going by recent performances.
Despite a projected, 1.86 million barrels daily oil production in the country’s 2021 budget, Nigeria recorded a deficit of almost 200 million barrels in the first 11 months of 2021, due to production challenges
Though Nigeria recorded an increase in production output in November following the lifting of force majeure on crude exports from Bonny Light terminal, the crude oil spill in Nembe creek, Bayelsa State, may have accounted for the further drop in active rigs..
Nigeria’s rig count dropped to six from seven recorded in November. As against 10 active rigs in the third quarter of 2021, the number of rigs closed the year at six, exactly the same figure at the beginning of 2021.
OPEC’s World Oil Demand growth projections for 2022 remains unchanged, at near 4.2mn b/d, signaling the prospective impact of the Covid-19 Omicron variant in the first half of the year and ongoing uncertainty over global inflation levels, supply bottlenecks
“While the impact of the Omicron variant is projected to be mild and short-lived, uncertainty remains regarding new variants and renewed mobility restrictions, amid an otherwise steady global economic recovery,” OPEC stated in its MOMR.
