Nigeria May Have Exceeded Renegotiated 1.5 Million Bpd OPEC Oil Output In January, Report Says 

There were indications at the weekend that Nigeria may have surpassed its 1.5 million bpd Organisation of Petroleum Exporting Countries (OPEC) renegotiated quota in its January oil production.

Oil shipping data tracked by Reuters in a survey for the month showed that Nigeria exceeded its January production allocation by 40,000bpd, a development which is expected to be well received by the country, which has struggled for up to four years to meet its quota.

However, the new quota renegotiated in November last year between OPEC and Nigeria was a major reduction compared to the 1.742 million bpd, which the country failed to meet throughout last year.

The Reuters data aims to track supply to the market and aside from shipping data provided by external sources, also deploys information from companies that track flows – such as Petro-Logistics and Kpler – and information provided by sources at oil companies, OPEC, and consultants.

In November 2023, OPEC+ handed Nigeria a 2024 oil output target lower than Africa’s largest oil producer had hoped for while lowering Angola’s target.

That action led to the exit of the southern African country.

The slash in Nigeria’s quota followed a meeting in June where OPEC+ agreed on a complex deal that revised production targets for several members, after which it tasked three consultancies – IHS, Rystad Energy, and Wood Mackenzie – with the job of verifying production figures for Nigeria, Angola, and Congo.

However, the Minister of State, Petroleum (Oil), Senator Heineken Lokpobiri, during the week, told journalists in Abuja that the 1.5 million bpd was not sacrosanct, stressing that negotiations would be restarted if the need for a raise in production output arose.

“Nigeria raised output by 40,000 bpd, the survey found, as some crude was processed in the new Dangote refinery and exports held largely steady. Output was 40,000 bpd above the country’s 2024 target,” the report stated.

In January, OPEC reported that Nigeria’s December production, according to secondary sources, was 1.418 million bpd, an increase of 100,000 bpd when compared with the previous month, according to THISDAY checks.

The report showed that output in January was 214,000 bpd above the implied OPEC target, largely because Iraq, Nigeria, and Gabon are pumping more than their targets.

However, overall, OPEC oil output in January registered the biggest monthly drop since July, as several members implemented new voluntary production cuts agreed with the wider OPEC+ alliance and unrest curbed Libyan output.

The organisation pumped 26.33 million bpd during the month under consideration, down 410,000 bpd from December. December’s total stripped out Angola, which has left OPEC.

The latest general decline marked a further drop in market share for OPEC, which began curbing output in late 2022, to support the market and counter increased output from non-OPEC countries such as Brazil and the United States.

In January, the biggest decline came from Libya, one of the OPEC members not required to restrain output, after unrest prompted the shutdown of the Sharara oilfield, one of the country’s largest.

Some OPEC members pledged voluntary cuts in two rounds – in April 2023 and November 2023, and Saudi Arabia made an additional voluntary cut, the report stated.

Iraq and Kuwait each cut output by 140,000 bpd as part of the new round of voluntary cuts, although Iraqi output remained 141,000 bpd above the country’s self-declared target for the first quarter.

The next-largest cut came from Iran, also exempt from quotas, which lowered exports, the survey found. Iran is still pumping near a five-year high reached in November after posting one of OPEC’s biggest output increases in 2023 despite US sanctions still being in place, according to the survey. Algeria cut output by 40,000 bpd, implementing most of its voluntary reductions.

Emmanuel Addeh

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