Oil revenue plunges as Nigeria misses OPEC’s January quota
• FG officials blame vandalism, delay in PIA implementation, etc.
Nigeria missed its crude oil production target for January 2022, pumping 1.46 million barrels per day against a target of 1.683 million bpd endorsed by the Organization of the Petroleum Exporting Countries.
Officials from the Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited said the country’s continued failure to meet its production target had caused oil revenues to fall repeatedly, resulting in the monthly drop in remittances from Nigeria. NNPC on behalf of the Federation.
They, however, attributed Nigeria’s prolonged inability to meet its OPEC production quota to the wave of pipeline vandalism, the delay in fully implementing the Petroleum Industry Act, among others.
They told our correspondent that prior to the President’s approval of the PIA in August 2021, some international oil companies were already cold-eyed about investing in the upstream oil sector.
It was learned, however, that the president’s assent to the PIA gave confidence to some of the CIOs.
But government officials explained that the slowdown in the implementation of the PIA, coupled with the recent suspension of the removal of gasoline subsidies and a possible amendment to the law, is currently having a negative impact on the sector.
These factors, according to experts and senior government sources, contribute to Nigeria’s failure to meet its OPEC crude oil production target.
Nigeria is a strong and long-standing member of OPEC. A document obtained on Tuesday from the 13-member organization, which was a Reuters survey of OPEC’s crude oil output for January 2022, showed the country’s output last month fell short of the production target for OPEC. crude oil approved by OPEC.
Nigeria’s production of 1.46mbd in January was observed to be slightly higher than its December 2021 output of 1.41mbd, but the survey highlighted that OPEC was struggling to pump to the target due to members’ inability to achieve their goals despite rising oil prices.
The survey said that OPEC’s production in January this year increased by 210,000 barrels per day compared to December 2020 production, adding that Angola and Nigeria were among the producers who did not could not achieve their goals.
He said OPEC’s oil output in January was again below the increase expected under a deal with allies, pointing to some producers’ difficulty in pumping more as prices trade lower. a seven-year high.
“OPEC pumped 28.01 million barrels per day in January, up 210,000 bpd from the previous month, but below the 254,000 bpd increase allowed under the deal. supply,” the document reads in part.
OPEC and its allies, a group known as OPEC+, had agreed to allow a 400,000 bpd production increase in January from all members, of which about 254,000 bpd was shared by the 10 members of OPEC participating in the deal, according to OPEC documents.
Commenting on the factors limiting Nigeria’s ability to meet its OPEC quota, an NNPC official, who pleaded not to be named for lack of clearance, said: “Vandalism, oil theft and impact of COVID-19 affect our production capacity. .
“However, it is important to clarify that with the global energy transition, IOCs are not very keen on increasing crude oil production. Although this is a global issue.
Another source from the oil company observed that “apparent uncertainties in the implementation of the PIA, coupled with declining investment and divestments by IOCs, particularly onshore and shallow water assets, are also weighing on our oil production.
Speaking further on the matter, an impeccable source at FMPR told our correspondent that the fall in oil production also justifies the monthly drop in remittances to the Federation Accounts Allocation Committee by NNPC.
“This is despite rising crude oil prices, which recently topped $90 a barrel,” the source said.
Meanwhile, industry figures seen on Tuesday showed the cost of Brent crude, the crude against which Nigerian oil is priced, edged down $0.78 or 0.87% to $88.48 on barrel at 4 p.m. Nigerian time.
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