The Organisation of the Petroleum Exporting Countries (OPEC) has announced the increase of Nigeria’s oil production quota from the 1.735 million barrels per day (mbpd) target approved in May 2022 to a new target of 1.772mbpd for June 2022.
This is coming against the backdrop of Nigeria struggling to meet its approved OPEC crude oil quota with an alleged average oil output of 1.24 mbpd in the month of March amid reports of increasing cases of crude oil theft.
This disclosure is contained in a statement issued by OPEC on Thursday in which it said that the group took the decision at its 28th OPEC and non-OPEC Ministerial Meeting despite Nigeria missing its approved target for April 2022 by 40,000bpd.
The new target is 19,000bpd higher than the approved quota for May 2022.
OPEC also made an upward adjustment of the monthly overall production by 432,000bpd for the month of June 2022 with a target production of 42.558mbpd.
What OPEC is saying
The statement from OPEC partly reads, “Following the conclusion of the OPEC 28th and non-OPEC Ministerial Meeting, held via videoconference on May 5, it was noted that continuing oil market fundamentals and the consensus on the outlook pointed to a balanced market.
“It further noted the continuing effects of geopolitical factors and issues related to the ongoing pandemic.’’
OPEC stated that the meeting reaffirmed the decision of the 10th OPEC and non-OPEC Ministerial Meeting on April 12, 2020, and endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on July 18, 2021.
The statement said the meeting also reconfirmed the production adjustment plan and the decision to adjust upward the monthly overall production by 432,000bpd for the month of June 2022.
It said the meeting reiterated the critical importance of adhering to full conformity and to the compensation mechanism, taking advantage of the extension of the compensation period until the end of June 2022.
What you should know
- The Nigerian oil and gas industry has been facing a lot of challenges recently as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) stated that oil output dropped to an average of 1.24 million barrels per day (bpd in March) from 1.25 million recorded in February 2022.
- According to Reuters’ survey, Nigerian output posted a 40,000bdp decline in April 2022, as force majeure remains in place on the Bonny Light export stream.
- It noted that in spite of the decline in production by Nigeria, OPEC pumped 28.58mbpd in April, up 40,000 bpd from the previous month and short of the 254,000bpd increase called for under the supply deal.
- OPEC+, has been gradually relaxing record output cuts in place since the outbreak of the Covid-19 pandemic in 2020.
- Under a deal reached in July last year, the group is set to increase output targets by 432,000 bpd every month until the end of September, to unwind its remaining production cuts.
- Last month, it agreed to go ahead with the planned output increase for May.
