…body cites insufficient oil investments

The Organisation of Petroleum Exporting Countries on Monday said insufficient investments in the oil sector had limited the capacity of Nigeria and other OPEC member nations to pump the volumes of crude oil approved by the organisation.

OPEC also revealed that in April 2022, Nigeria’s oil production plunged by 40,000 barrels per day, translating to 1.2 million barrels during the review month.

Citing findings contained in a Reuters survey, OPEC stated its oil output in April undershot the rise that was planned under a deal with allies, as declines in Libya and Nigeria offset supply increases by Saudi Arabia and other top producers.

“Output undershot the pledged hikes from October to March, with the exception of February, according to Reuters surveys, as many producers lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic,” OPEC stated.

It added, “As a result, the 10 OPEC members are pumping far less than called for under the deal. OPEC compliance with pledged cuts was 164 per cent, the survey found, versus 151 per cent in March.”

Nigeria is a long-standing member of OPEC, though the country has been failing to meet its crude oil production quota approved by the organisation for months now.

The survey stated that OPEC pumped 28.58 million barrels per day in April, up 40,000bpd from the previous month and short of the 254,000bpd increase called for under the supply deal.

OPEC and its allies, known as OPEC+, are slowly relaxing 2020 output cuts as demand recovers from the pandemic.

OPEC+ meets on Thursday and is expected to confirm a previously agreed output hike despite the surge in oil prices after Russia’s invasion of Ukraine.

The deal called for a 400,000bpd increase in April from all OPEC+ members, of which about 254,000bpd is shared by the 10 OPEC producers that the agreement covers.

The survey specifically noted the drop in crude oil production from Nigeria and Libya.

It stated that the biggest drop in output was in Libya, which at one point in April was losing more than  550,000bpd from blockades on fields and terminals. Libya is one of the OPEC members exempt from making output cuts.

“Nigerian output posted a 40,000bpd decline, the survey found, with lower exports than in March. Force majeure remains in place on the Bonny Light export stream,” OPEC stated.

It added, “These outages limited the increase in OPEC’s output as top producers followed through on the pledged hike in supply. The biggest rise in April of 100,000bpd came from Saudi Arabia, the survey found.”

It stated that Iraq, which reported a month-on-month rise in exports, boosted output by 80,000bpd, while the United Arab Emirates followed through on its higher quota and added 40,000bpd, as Kuwait’s output edged up by 10,000bpd.

It said Iran, also exempted from making output cuts, had been shipping more product to China in 2022 and production rose in April, according to the survey, even as talks on reviving its 2015 nuclear deal with world powers had yet to reach a deal.

OPEC stated that Production in Venezuela, another exempted producer, edged higher. It said production fell or did not increase in Angola, Equatorial Guinea and Gabon, based on the survey, because of a lack of capacity to produce more.

The survey observed that OPEC and allies, known as OPEC+, were unwinding record output cuts made in 2020 yet were struggling to achieve their planned monthly production increases.