The Organization of Petroleum Exporting Countries (OPEC) said on Monday that insufficient investments in the oil sector had constrained Nigeria’s and other OPEC member countries’ capacity to pump the volumes of crude oil agreed by the group.
OPEC also announced that Nigeria’s oil production fell by 40,000 barrels per day in April 2022, equating to 1.2 million barrels for the month under consideration.
According to Reuters polls, output fell short of pledged increases from October to March, with the exception of February, since many producers lack the capacity to pump more crude due to a lack of investment, a trend compounded by the epidemic,” OPEC noted.
“As a result, the 10 OPEC members are pumping substantially less than the pact requires,” it continued. According to the study, OPEC compliance with pledged reduction was 164 percent, up from 151 percent in March.”
Nigeria has been a member of OPEC for a long time, but it has been failing to meet the organization’s crude oil production quota for months.
OPEC said its oil output in April fell short of the increase envisaged under a deal with allies, citing figures from a Reuters survey, as declines in Libya and Nigeria offset supply increases by Saudi Arabia and other key producers.
According to the study, OPEC pumped 28.58 million barrels per day in April, up 40,000 barrels per day from the previous month but still short of the 254,000 barrels per day increase required under the supply agreement.
As demand improves after the epidemic, OPEC and its allies, known as OPEC+, are gradually easing 2020 output curbs.
OPEC+ meets on Thursday, and despite the rise in oil prices following Russia’s invasion of Ukraine, it is poised to confirm a previously negotiated output raise.
The accord called for a 400,000bpd boost from all OPEC+ members in April, with around 254,000bpd shared among the ten OPEC producers covered by the arrangement.
The reduction in crude oil production from Nigeria and Libya was highlighted in the report.
It reported that the country with the greatest decline in output was Libya, which was losing more than 550,000bpd at one point in April due to blockades on fields and terminals. Libya is one of the OPEC members who is not required to restrict output.
“The survey indicated that Nigerian output fell by 40,000 bpd in April, with lower exports than in March. The Bonny Light export stream is still under force majeure, according to OPEC.
“These outages hampered OPEC’s output increase as top producers followed through on their agreed supply hike,” it continued. Saudi Arabia saw the largest increase of 100,000 bpd in April, according to the report.”
Iraq increased output by 80,000 barrels per day (bpd), while the United Arab Emirates increased its quota by 40,000 barrels per day (bpd), and Kuwait’s output increased by 10,000 barrels per day (bpd).
According to the study, Iran was shipping more merchandise to China in 2022 and production surged in April, despite the fact that discussions on renewing its 2015 nuclear deal with world powers had failed to achieve an agreement.
According to OPEC, production in Venezuela, another exempted producer, increased somewhat. According to the report, production declined or did not increase in Angola, Equatorial Guinea, and Gabon due to a lack of capacity to produce more.
The study found that OPEC and its partners, known as OPEC+, were struggling to meet their monthly production targets despite undoing unprecedented output cuts agreed in 2020.
