The Organisation of Petroleum Exporting Countries (OPEC) yesterday increased Nigeria’s production quota to about 1.8 million (1.799) barrels per day. For the first time since April 2020.
The new oil drilling limit increased Nigeria’s production deficit by an estimated 400 000 barrels per day since the country had only been able to produce about 1.4 million barrels daily of the 1.8 BPD ratio.
The cartel and its allies, OPEC+, would increase oil production by 648,000 barrels per day in July instead of the 400,000 BPD initially approved and the subsequent increase to 432,000bpd.
This was just as the Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, has said that with about 26 per cent of all Nigeria’s gas exported to Spain, the country remains a major market for Nigeria.
Also, the Defence Headquarters (DHQ) said yesterday that troops of the Nigerian Navy under Operation Octopus Grip and Operation Delta Safe discovered and destroyed 40 illegal refineries in the Niger Delta region in the last two weeks. Nigeria had blamed massive oil theft, years of declining upstream investment, the inability to restart oil wells shut in the wake of the Covid-19 pandemic, and outright sabotage by oil-producing communities for its lack of capacity to raise production.
From the approved schedule, Saudi Arabia would drill 10.833 million barrels per day in July, the same for Russia, while the UAE would produce 3.127 million barrels per day.
In the same vein, Angola would produce 1.502 barrels per day, Iraq would be 4.58 million BPD, while Algeria was given a limit of 1.039 million BPD.
THISDAY learnt that the increase by over 200,000 BPD was possibly to partly compensate for a small portion of Russian oil, which has been shut in due to sanctions spurred by its war with Ukraine.
A communiqué released by the organisation after the 29th OPEC and non-OPEC ministerial meeting held via videoconference also acknowledged the most recent reopening from lockdowns in major global economic centres.
It further noted that global refinery intake was expected to increase after seasonal maintenance and highlighted the importance of stable and balanced markets for crude oil and refined products.
“The meeting, therefore, resolved to Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial meeting on April 12, 2020 and further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on July 18 2021.
“Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC Ministerial Meeting and the decision to adjust the overall monthly production upward by 0.432 mb/d for July 2022.
“Advance the planned overall production adjustment for the month of September and redistribute equally the 0.432 mb/d production increase over the months of July and August 2022. Therefore, July production will be adjusted upward by 0.648 mb/d,” it stated.
It also resolved to extend the compensation period until the end of December 2022, as requested by some underperforming countries and called on underperforming countries to submit their plans by June 17, 2022.
While reiterating the importance of adhering to full conformity and the compensation mechanism, OPEC noted that its next meeting would be held on June 30, 2022.