Oil production shortfall calculated from allotted OPEC quota
By Jeph Ajobaju, Chief Copy Editor
Abuja lost N500 billion revenue in January as a result of low crude oil production, according to shipping data compiled by Refinitiv Eikon which tracks export flows.
The data shows Nigeria’s output is yet to fully recover, having exported 1.2 million barrels per day (mb/d) against 1.6 mb/d quota allotted to it by the Organisation of Petroleum Exporting Countries (OPEC).
Export of 1.2 mb/d brings January’s total to 37.2 million barrels, down on 49.6 million if 1.6 mb/d had been shipped.
Nigeria’s crude grade, Bonny Light, sold for $89 per barrel (pb) in January, above Brent International, which went for $88 pb.
This translated to N1.5 trillion revenue from 37.2 million barrels exported in January instead of N2 trillion if OPEC quota had been met.
It means the treasury lost about N500 billion oil revenue in January for running short of 1.6 mb/d OPEC quota, according to reporting by The PUNCH.
Nigeria was not the only country that performed below the bar set by OPEC.
Refinitiv Eikon data shows Iraqi exports declined due to less output from its southern fields, Saudi Arabia was thought by some sources in the survey to have trimmed exports, but output in the United Arab Emirates rose by about 10,000 bpd.
Among Libya, Iran and Venezuela, the three producers exempt from OPEC cuts, Venezuela’s output was slightly higher and there was a small decline in Iran, which registered a surge in exports in December, according to the survey.
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Fluctuations in set targets
OPEC pumped 28.87 mb/d in January, the survey found, down 50,000 mb/d from December. In September, OPEC output hit its highest since 2020, according to Refinitiv Eikon, per The PUNCH.
The cartel had in November called for a 2 mb/d cut to the OPEC+ output target, of which about 1.27 mb/d was meant to come from the 10 participating OPEC countries.
The 10 OPEC members required to cut production pumped 920,000 bpd below January target, the survey found. The shortfall in December was 780,000 bpd.
With the drop in output last month, compliance with the agreement rose to 172 per cent of pledged cuts, against 161 per cent in December.
Both Nigeria and Angola were said to lack the capacity to pump at the agreed levels.
Effects of pipeline vandalism
Nigerian National Petroleum Company (NNPC) Chief Executive Officer Mele Kyari has blamed low oil production on pipeline vandalism through which he said thieves steal 900,000 bpd.
Nigeria’s oil export crashed 83 per cent in the 10 years from 2012 through 2021, per The PUNCH.
Output dipped to 900,000 bpd in September 2022, OPEC data shows.
But in December, NNPC Upstream Investment Management Services Chief Investment Officer, Bala Wunti, disclosed production was back up to about 1.6 mb/d.
“Crude theft affects all architecture that funds the country. When the oil theft reached its peak, everything including gas production was affected,” he said.