OPEC cuts Nigeria’s oil quota by 4.6% to 1.742mb/d

Organisation of Petroleum Exporting Countries and its allies, OPEC+, have cut Nigeria’s oil output by 4.6 per cent to 1.742 million barrels per day, mb/d, minus condensate, for November 2022 market, from 1.826 mb/d in August 2022.

It was part of measures adopted on Wednesday to achieve market stability following increased volatility, which witnessed the prices of many crude oil grades, including Nigeria’s Bonny Light, dropping below $90 per barrel last week, from about $100.

The ‘November 2022-December 2023’ data showed that amongst African producers, Nigeria’s 1.742 mb/d was the highest, while Sudan’s 72,000 bp/d was the lowest.

In its review of the market, Wednesday, OPEC+ maintained that the market situation was still clouded by some uncertainties, adding that it remained committed to achieving stability.

The price of Nigeria’s Bonny Light rose to $93.36 per barrel, from $90 per barrel recorded the previous day.

This showed $28 per barrel in excess of the nation’s $62 per barrel 2022 budget benchmark, even though losses associated with oil theft and fuel subsidy still impact negatively on the ability of the oil revenue to deliver desired budgetary estimates.

Vanguard reports that Nigeria might not be able to meet the new target because of increased pipeline vandalism, oil theft, and illegal refining in the Niger Delta.

In its latest report, “Crude Oil and Condensate Production 2022” obtained by Vanguard, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, disclosed that Nigeria produced 972,394 barrels, excluding condensate in August 2022, showing more than 700,000 bpd less than its 1.826 mb/d, during the period.

Meanwhile, OPEC+ has extended the duration of the Declaration of Cooperation, which involves the commitment of all members, initially scheduled to end in 2022, until the 31st of December 2023.

In a statement, OPEC+ said, “In light of the uncertainty that surrounds the global economy and oil market outlooks, the Participating Countries decided to reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020.

“Extend the duration of the Declaration of Cooperation until the 31st of December 2023. Adjust downward the overall production by 2 mb/d, from the August 2022 required production levels, starting November 2022 for OPEC and Non-OPEC Participating Countries.”