- Nigeria and Iraq have been highlighted as contributing to the low oil production output of OPEC member countries in April 2023.
- Nigeria lost approximately 300,000 barrels per day of oil during the strike action initiated by PENGASSAN from April 13 to the end of the month when issues were finally resolved.
- NNPCL has already said the strike action was initiated when crude oil production rates were getting better after the 2022 struggle against oil theft.
Nigeria and Iraq contributed to low OPEC oil output in April 2023, this is according to a Reuters survey conducted on Tuesday, May 2.
Reuters reports that data from various sources shows that oil output from the Organization of Petroleum Exporting Countries (OPEC) in April 2023, fell due to a halt in some of Iraq’s exports and delays to Nigerian shipments. Reuters says this situation adds to the impact of strong adherence by top producers to a supply cut deal by the wider OPEC+ alliance. Reuters stated:
- “The Organization of the Petroleum Exporting Countries pumped 28.62 million barrels per day (bpd) last month, down 190,000 bpd from March. Output is down more than 1 million bpd from September.”
The Nigerian context
On April 13, 2023, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) initiated a strike action at Mobil Producing Nigeria Unlimited and Esso Exploration and Production Nigeria Limited facilities across the country.
The strike action constrained 300,000 barrels of oil per day. The strike action was initiated because industrial relations at Mobil broke down due to the stalemate of the 2023 Collective Bargaining Agreement and proposed changes to the rota schedule of operations staff.
However, the leadership of the Nigerian National Petroleum Company (NNPC) Limited intervened and the issue was resolved on April 26. Mobil and the Union signed off on a pay adjustment and resolved to put a working team together that will have a 5-month timeline to review the proposals for a possible change in the rota schedule for operations staff and parameters for implementation.
However, the damage to oil output had already been done. In an earlier statement addressing the issue between Mobil and PENGASSAN, the NNPC stated that the strike action commenced in the aftermath of the recovery of national production from an all-time low of sub one million barrels of crude oil production per day in July 2022 to over 1.67 million barrels per day in March 2023.
What you should know
The French pension strikes may have also affected Nigeria’s crude oil revenues for the month of April 2023. Recall that in March 2023, Nairametrics reported that the French pension strikes and protests could impact Nigeria’s crude trade.
- The pension strikes impacted the crude oil trade as refineries shut down across the country. At the time, 20-25 shipments of Nigerian crude for April loading were looking for buyers, potentially leading to a drop in shipment prices.
- It is worth noting that data from the National Bureau of Statistics highlight France as Nigeria’s 4th largest crude oil export destination with about N498 billion of trade deals recorded in Q4 2022, making the country Nigeria’s third largest crude oil export destination.
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