Nigeria pumps $3.9bn crude oil in 31 days - NEW TELEGRAPGH

JANUARY 14, 2020

Nigeria had proposed 2.3 million barrels daily crude oil production for 2019, but output remained below target and above OPEC quota


  • Output balloons to 57.04m barrels


BY   Adeola Yusuf

The crude oil and condensate productions from Nigeria hit $3.9 billion in December 2019.

Data compiled by New Telegraph, using statistics from the Organisation of Petroleum Exporting Countries (OPEC) for December, also revealed that Africa’s biggest crude oil exporter produced 57.04 million barrels in 31 days of the month.

Nigeria, according to OPEC, pumped 1.84 million barrels daily, according to the OPEC survey. That is 90,000 b/d above its 2020 quota. 

Although Nigeria insists that some of its barrels should be counted as condensate, which is not subject to production restrictions under the deal, the country’s production amounted to 57 million barrels in the entire 31 days.

Nigeria had proposed 2.3 million barrels daily crude oil production for 2019, but output remained below target and above OPEC quota.

Using OPEC average daily basket price, which stood at $67.93 a barrel, the 57 million output worth $3.8747272 billion. 

The price of OPEC basket of 14 crudes, the organisation said in December, stood at $67.93 a barrel. The price equaled the price on the same Thursday, compared with $67.77 the previous day, according to OPEC secretariat calculations.

The OPEC Reference Basket of Crudes (ORB) is made up of the following, Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Meanwhile,  the latest S&P Global Platts survey finds that OPEC trimmed its crude oil production by 100,000 barrels daily (b/d) in December, putting the bloc under its new, more-stringent quotas a month early. 

OPEC pumped 29.55 million barrel per day, according to the survey, with Saudi Arabia producing well below its cap and compliance laggards, Iraq and Nigeria, improving their discipline.

Now entering their fourth year of production cuts to prop up the oil market, OPEC, Russia, and nine other countries agreed last month to deepen their cuts to 1.7 million b/d — of which OPEC would shoulder 1.2 million b/d — from January to March.

Oil prices yesterday dropped lower than the week’s opening price, as Brent slipped to $64.63 and WTI, $58.80 while Nigeria’s Bonny Light was $67.58 as at 4.27pm GMT.

 The 10 members with quotas under the accord, which exempts Iran, Libya, and Venezuela, produced 25.06 million b/d in December, making good on their new collective ceiling of 25.15 million b/d.

Despite the reduced output and concerns about supply disruptions because of escalating hostilities in the Middle East, OPEC officials have said the market is in no danger of a shortage and that they see no reason to reverse their cuts for now.

Indeed, many analysts continue to forecast a supply glut through the first half of the year and say additional production restraint from OPEC and its partners may be needed to prevent an oil price slump.


Saudi Arabia, OPEC’s largest producer by far, trimmed its production in December to 9.82 million b/d, according to the survey, after surging it in November to replenish stocks depleted in the wake of the September 14 attacks on the Abqaiq  processing facility and Khurais oil field. 

That is far below its quota of 10.31 million b/d under the deal that expired at the end of December, and also well under its new cap of 10.14 million b/d. Saudi Energy Minister, Prince Abdulaziz bin Salman, has pledged to hold the kingdom’s output at around 9.74 million b/d starting in 2020, as long as other members respect their quotas.


So far, however, Saudi over-compliance has been masking underperformance by others.


Iraq, which has consistently flouted its cap, scaled back its production to a nine-month low of 4.58 million b/d in December, the survey found. OPEC’s second-largest producer will need to cut an additional 120,000 b/d to meet its new target of 4.46 million b/d.

The UAE trimmed its output by 60,000 b/d to a 15-month low, while Libya experienced issues with its El Feel field, which dropped its production by 30,000 b/d. Sanctions-impaired Iran saw its production fall by the same amount, the survey found.

Venezuela, also under US sanctions, saw a modest 20,000 b/d rise as its crude exports rebounded, while Ecuador and the Republic of Congo saw similar gains, according to the survey. 

December was Ecuador’s last month as an OPEC member, with its energy ministry, on January 2, confirming the country’s decision to exit the organisation due to financial needs that it said made further production cuts unpalatable. But sources close to Ecuador and OPEC told Platts that the two sides have been discussing a potential return.

Overall, OPEC’s compliance with its cuts was 158 per cent for December, according to Platts’ calculations. Under the new quotas that went into force January 1, OPEC’s December production would result in 108 per cent compliance.


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