Nigeria's oil minister said Friday that the country will be able to reach its OPEC production quota by the end of August , as the country aims to strengthen the security of its oil industry.
Nigeria is OPEC's biggest production laggard and has consistently underperformed its production quotas since the production expansion agreement went into effect. According to secondary sources, Nigeria's crude oil production fell in May – the latest available data – to 1.262 million bpd. The May production quota foreseen by the OPEC agreement was 1.753 million bpd, a deficit of almost half a million barrels per day.
Nigeria has long been struggling with vandalism and theft in the oil sector. Promises to clean up the sector have failed to restore Nigeria's crude oil production capacity to its full potential. Corruption and thievery weigh heavily on production, with often
“For us in Nigeria, we are at a standstill. We are unable to meet our OPEC quota, ”Nigerian Oil Minister Timipre Sylva said at a press conference, while stressing that they should be able to do so soon. “We've given ourselves a month to make sure we can do it… we believe we'll see some improvement in safety by August,” added Sylva.
Sylva also dismissed the idea that OPEC could activate reserve capacity and pump more, citing capacity problems. "Right now, there is little capacity that can be put on the market."
The perceived lack of spare capacity among many OPEC members has helped keep oil prices high in recent months, despite the group's lofty ambitions regarding July production targets, which were set at 648,000 bpd in more than the June targets and over one million bpd more than the May targets, which were not met.
If Nigeria succeeds in meeting its August production target, it would make a huge difference in the oil markets, as it would supply a major portion of the oil currently missing for self-sanctions imposed by many companies on Russian oil. Furthermore, it would be an important push towards lower oil prices and a reduction in the inflationary push, even if the natural gas crisis would still weigh on.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/nigeria-forse-potebbe-raggiungere-le-quote-opec-petrolio-importantissimo-per-il-mercato-europeo/ on Sat, 25 Jun 2022 16:34:30 +0000.