How Nigeria’s oil output declines 11.47 percent Q2 2021: OPEC

*The oil cartel maintains solid expectations exist for global economic growth in 2022, including the improved containment of COVID-19, especially in emerging markets and developing countries

Isola Moses | ConsumerConnect

Citing the impacts of the novel Coronavirus (COVID-19) pandemic mostly in emerging and developing countries, the Organisation of Petroleum Exporting Countries (OPEC) data has indicated that Nigeria’s oil output dropped by 11.47 percent year-on-year (YoY) in the second quarter of 2021 (Q2 2021).

ConsumerConnect reports Nigeria is currently pegged to an export volume of about 1.4 million barrels per day, remarkably less than the 1.8 million barrels per day production volume that it has averaged over the years.

Likewise, the volume of crude is said to be a far cry from the country’s 2.5 million barrels per day oil production capacity.

It was gathered that the transnational oil cartel said the decline also showed significant under-production against the allotted quota to the leading West African oil producer.

OPEC, in its July 2021 Monthly Oil Market Report (MOMR), disclosed that on the average, Nigeria produced 1.343 million barrels per day in Q2 2021, compared to 1.517 mb/d produced in Q2’20.

This also compares negatively with the OPEC quota of 1.4 mb/d, agency report said.

The report has it that the country produced 1.372 mb/d, 1.344 mb/d and 1.313 mb/d, in April, May and June, 2021 respectively, compared to 1.705 mb/d, 1.436 mb/d and 1.411 mb/d, produced in the corresponding months of 2020.

At the Q2 2021 average output the country requires about 500 mb/d output of condensate to meet its 2021 budgetary target of 1.8 mb/d.

But at present, the estimated condensate output is put at 400 mb/d, indicating a likely significant shortfall, OPEC noted.

The shortfall, according to the organisation, may not affect revenue estimates since the 2021 oil revenue was based on oil price of $40 per barrel, while actual price in recent weeks have hovered above $70 per barrel.

The OPEC report, which painted a bright prospect for the oil market in the remaining part of 2021, also stated that “world oil demand growth in 2021 is forecast at 6.0 mb/d, unchanged from last month’s assessment, although there have been some regional revisions. Total oil demand is projected to average 96.6 mb/d.

“The Q1’21 was revised lower, amid slower than anticipated demand in the main Organisation for Economic Co-operation and Development (OECD), OECD consuming countries.”

It further explained: “This was counter-balanced by better-than-expected data from OECD Americas in Q2’21, which is now projected to last through the Q3’21.

“Solid expectations exist for global economic growth in 2022. These include improved containment of COVID-19, particularly in emerging and developing countries, which are forecast to spur oil demand to reach pre-pandemic levels in 2022.”

Meanwhile, the data contained in the Central Bank of Nigeria’s balance of payment report has noted that Nigeria’s crude oil exports fell by a whopping 41.9 percent year-on-year in the first quarter of 2021.

The country received in its current account, crude oil and gas export proceeds of $6.48 billion in the first quarter of 2021 compared to $11.1 billion in the corresponding period in 2020, report stated.

It equally represents a 16.4 percent drop when compared to the $7.7 billion recorded in the 4th quarter of last year.

Crude oil and gas export proceeds of $54.5 billion in 2019 made up about 84 per cent of the government’s export earnings.

However, crude oil and gas exports declined to $31.4 billion in 2020 as Covid-19 pandemic triggered a global economic lockdown crashing oil prices to below zero in the second quarter of 2020.

OPEC member countries have had to endure year-long collective crude oil cuts to help limit supplies, shoring up prices, according to repot.

While this has contributed to the stabilisation of oil prices, member countries have seen their revenues plummet as they cannot push out as much volumes as they would have preferred.

Nigeria is currently pegged to an export volume of about 1.4 million barrels per day, remarkably less than the 1.8 million barrels per day production volume that it has averaged over the years and a far cry from its 2.5 million barrels per day production capacity.

However, crude oil production is projected to increase to 1.86 million barrels per day in 2021, as the world economies recover from the recession, and moderated by OPEC+ quota agreements, report stated.

Kindly Share This Story