OPEC reiterates stand on production policy
By Felicia Nwosu
The Organization of Petroleum Exporting Countries (OPEC) has reiterated its stand regarding the oil production policy stating that there would be no change to its previous decision made in November 2022. This was revealed in a brief video-conference meeting
Recall that the intergovernmental Organizatio, in October 2022, agreed to cut its production target by 2 million barrels per day (bpd), which is about 2% of world demand, from November last year until the end of 2023 to support the market.
Prior to this, the Joint Ministerial Monitoring Committee (JMMC) had urged all participating countries to achieve full conformity and adhere to the compensation mechanism.
Meanwhile, in June 2022, OPEC revealed that it had increased Nigeria’s crude oil production quota from 1.766 million barrels a day in June to 1.799 million barrels per day for July 2022.
Also in August 2022, OPEC raised Nigeria’s crude oil output quota to 1.830 million barrels per day (mb/d), effective from September 2022.
However, Nigeria has failed to meet its crude oil production quota since then. This is due to the country’s constant battle with illegal appropriation of refined oil in the Niger Delta region, which is the main source of crude oil in Nigeria.
This decision by OPEC’s to stand its ground will provide Nigeria the opportunity to meet its quota, finally. Since 2022, the Nigerian National Petroleum Company (NNPC) Limited has been taking active steps to tackle crude oil theft, in collaboration with state and other participatory agencies. This development, therefore has given rise to a minimal increase in production as of December 2022.
Following the report made available by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country’s crude oil output without the addition of condensates for September 2022 was 937,766 bpd. For October 2022, the output was 1,014,485 bpd. Meanwhile, in November 2022, crude oil output was 1,185,604 bpd. In December 2022, the output was 1,235,317 bpd.
Meanwhile, Timipre Sylva, Minister of State for Petroleum Resources, has committed the country’ intense effort towards meeting its OPEC-approved crude oil production quota of 1.8 million bpd by the end of May 2023.
“Our pipelines have issues and we have put a security structure in place involving the communities, security personnel, oil companies and government and we are beginning to see some early signs of improvement.
Our production for example has improved from where we were in the past. We are producing over a million barrels now and we believe that when we have built confidence enough on the pipelines and all the producers begin to inject into the pipelines that have been secured, we will be able to produce quickly to meet our OPEC quota.”
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