According to the most recent information provided by the Organization of the Petroleum Exporting Countries, Nigeria’s poor oil production output persisted last month and was reflected in its dropping rig count and production volume (OPEC).
Nigeria’s rig count specifically decreased from 10 in August to seven in September despite the reported volume showing a production volume of 938,000 barrels per day (bpd), which is lower than the 972,000bpd reported in August. The restoration of operations at Forcados terminal is anticipated to increase the volume.
In reaction to a worsening economic outlook, the cartel significantly reduced its prediction for the increase of the global oil demand for both this year and 2023 on Wednesday. The modification was made less than a week after the OPEC+ coalition decreased its crude oil quota by 2 million barrels per day in response to similar worries.
Nigeria and other nations with low production output will keep their quota under the cartel’s pact, despite other producers experiencing a boom as a result of high prices.
According to the NUPRC data, Nigeria’s output has been progressively decreasing since the first quarter of 2020, when it generated about twice as much.
The Niger Delta pipelines are to blame for killing off investment and causing widespread thievery, according to the administration. None of the three major export grades, Bonny, Brass, and Forcados, produced more than 8,000 barrels per day in September due to previous declines in production.
According to Mele Kyari, group CEO of NNPCL, Nigeria intends to increase its production by 500,000 barrels per day by the end of November, mostly by resuming operations at Shell Plc’s Trans-Niger pipeline and Forcados port.
Shell announced yesterday that it is prepared to resume export operations by the end of this month, when continuing critical repairs will be finished.
“In addition to the repairs, we are working to remove and clamp theft points on the onshore pipelines to ensure full crude oil receipt at the terminal,” SPDC’s Media Relations Manager, Abimbola Essien-Nelson, said in a statement on Wednesday.
According to Essien-Nelson, the company’s ongoing program to remove illegal connections on the pipelines that feed the terminal includes both the active illegal connections to the SPDC joint venture’s production lines and facilities in the western Niger Delta and the inactive illegal connection to the onshore portion of the 48″ Forcados Export Line.
She stated: “SPDC gives priority to the removal of active illegal connections and to illegal connection points that have leaks. This scheduled programme is continuous as new illegal connections are identified during the surveillance of the pipelines. An example of such an illegal connection is that on the onshore section of the 48” Forcados Export Line which is currently not active and has no sign of leak at the interconnection point.”
Essien-Nelson reaffirmed SPDC’s dedication to managing its assets in a safe, dependable, and in compliance with generally recognized best practices.
“SPDC continues to work tirelessly, alongside government and partners, towards the eradication of crude theft from its infrastructure,” she said.
According to OPEC’s most recent Monthly Oil Market Report, the world’s oil demand growth is now anticipated to reach 2.64 million barrels per day (b/d) this year, down 460,000 barrels per day from its previous forecast (MOMR). The projected demand growth for the upcoming year has been reduced by 360,000 b/d to 2.34 mn b/d.
The 2022 change was made, according to OPEC, because of “the extension of China’s zero-Covid-19 limitations in some regions, economic difficulties in OECD Europe, and inflationary pressures in other key economies.” The same justifications were offered last week by the larger OPEC+ group for a 2mn b/d decrease in its collective crude output target from November.
Notably, OPEC now anticipates a 60,000 b/d decline in demand from China, the largest crude importer in the world, this year. Chinese demand was predicted to increase by 120,000 b/d in 2022 last month. The demand for petroleum from OPEC’s own members is expected to be 28.68 million b/d this year and 29.45 million b/d next year, down from the previous MOMR by 200 000 b/d and 300 000 b/d, respectively.
Regarding supply, OPEC has reduced its projection for non-Opec liquids growth to 1.93mn b/d this year, down 180,000 b/d from the previous report, with upgrades in Latin America counterbalancing downgrades in OECD Europe, Asia-Pacific, and portions of Eurasia. However, “strong inflationary pressure, coupled with logistical bottlenecks and shortages of material and labor, are providing additional hurdles,” according to OPEC. US output will be supported by increases in oil, gas, and drilling activity.
The organization has decreased its forecast for US oil output growth to 1.09 million b/d in 2022 from 20,000 b/d last month. To just 60,000 b/d this year, it has reduced its expectation of the growth in Russian oil production. The forecast for growth in non-Opec liquids supply for 2023 has been decreased by 200,000 b/d to 1.73mn b/d.