Adedapo Adesanya
By Adedapo Adesanya
Nigeria has written the Organisation of Petroleum Exporting Countries (OPEC), requesting a higher production quota under the current OPEC+ cut deal.
This was disclosed by the Minister of State for Petroleum Resources, Mr Timipre Sylva, while speaking on the sidelines of the Gastech 2021 conference in Dubai, the United Arab Emirates (UAE) on Tuesday.
Mr Sylva noted that the technical problems that had hampered the country’s output would soon be resolved.
“We’ve just put a request on the table and we expect that to be looked at. We have the capacity for more production than we are producing right now. Unfortunately, we are constrained by the quota,” the Minister said.
“We had some issues from shutting down the reservoirs,” he said. “When you shut down a reservoir, to restart it, sometimes there are challenges,” he added.
Nigeria’s quota, which covers only crude oil and not condensates, is 1.614 million barrels per day for September and was scheduled to rise by roughly 17,000 barrels per day each month, in line with the OPEC+ alliance’s plans to gradually ease back on production cuts implemented in April 2020.
Mr Sylva said the country’s full production capacity was closer to 2.2 million barrels per day, which should be reflected in a revised quota, even though Nigeria has struggled to produce at its current allocation.
“The basis for giving us this quota was (that Nigeria was in) a crisis. Right now, we don’t have any crisis anymore, and we believe we can produce more,” Mr Sylva said.
In August, Nigeria was one of the three countries (Angola and Kazakhstan) that have found it difficult to increase output as the country which is Africa’s largest crude producer published 1.27 million barrels daily in August, down from 1.44 million barrels a day in July.
Mr Sylva insisted that the country deserves a higher quota, noting that aside from its efforts to fix the technical difficulties, the basis for the current production quota, which was mainly because of the problems in the Niger Delta at the time, no longer exists.
Key Nigerian grade Forcados had been disrupted for almost a month until Shell lifted force majeure on loadings on September 10.
Other Nigerian crudes such as Bonny Light, Escravos, and Qua Iboe have also faced production issues in recent months due to operational and technical reasons.
OPEC+ is scheduled to meet on October 4, with the current OPEC+ agreement calling for the group to collectively raise output by 400,000 barrels per day each month through the end of 2022 and a review of the pact scheduled in December 2021.
OPEC+ sources said oil production cuts rose to 116 per cent in August. The figure, which excludes Mexico, compares with 109 per cent in July.
