Nigeria’s 1.97mbpd June volume highest since 2015, says survey
’Compliance pressures expected in coming months’
Organisation of the Petroleum Exporting Countries (OPEC’s) compliance with its production quotas fell sharply in June, as output gains in the month by Saudi Arabia and Nigeria, along with Iraq’s continued flouting of its cap, shrank the bloc’s margin despite its supply cut agreement.
According to Platts’ data, Nigeria’s production rose to 1.97 million barrels per day (mbpd) last month, up from the 1.69mbpd quota under the cut agreement, signalling the nation’s highest output since January 2015.Among OPEC’s 11 members with quotas, Nigeria and Iraq were the least compliant, as Platts’ survey showed that pressure on both countries to comply with their quotas is expected to grow in the coming months.
Nigeria’s 1.97 million bpd output is its highest since January 2015, as its newest deepwater field Egina, which started production six months ago, is already pumping close to its capacity of 200,000 bpd.
The June figure was 110,000 bpd rise from May as none of Nigeria’s crude export grades are currently under force majeure. To meet its 2.3mbpd target for the 2019 budget, the Nigerian National Petroleum Corporation (NNPC), last month restated its commitment to resume oil search in the Chad Basin as soon as it receives security clearance.
The 11 members covered by quotas remain over-compliant with their committed cuts, but only by 40,000 bpd, for a conformity rate of 104 per cent, an S&P Global Platts survey of industry officials, analysts and shipping data found. That is down from May’s rate of 117 per cent.
OPEC as a whole pumped 30.09mbpd, steady from May, the survey found, although much of the month’s decline came from exempt Iran and Libya, and were offset by the Saudi and Nigerian surges, leading to the lower compliance rate.
OPEC and 10 non-OPEC allies, led by Russia, last week extended their 1.2mbpd production cut agreement through March 2020, as they aim to prop up oil prices, and had touted their impressive compliance as evidence of their firm resolve to rebalance the market.With U.S. sanctions likely to shut in more production from OPEC members Iran and Venezuela, which is also exempt from the deal, the remaining members will have less room to raise output to make up for any losses and stay under their collective ceiling.Saudi Arabia saw its production jump by 150,000bpd in June to 9.85mbpd, assisted by sharp growth in crude exports along with a rise in direct crude burn amid soaring summer temperatures, the survey found.
This is the kingdom’s highest output since March, but it remains 460,000bpd below its quota of 10.31mbpd. Saudi’s oil minister, Khalid al-Falih, assured the market at last week’s OPEC meeting in Vienna that the kingdom will keep its production below 10mbpd in July.
Iran pumped its fewest barrels since September 1988 as output remains thwarted by stringent US sanctions. The country saw its production fall 100,000bpd to 2.35mbpd, with dramatic fall in its crude exports somewhat offset by a significant build in crude storage, according to survey panellists.
Iraqi crude output fell to 4.77mbpd from a record high of 4.82mbpd in May, on lower exports from its southern terminal, the survey found. Iraq’s quota under the deal is 4.51mbpd. Angola, OPEC’s second-largest African producer, saw its output slide to 1.39 million b/d in June, its lowest since joining OPEC in 2007, according to the survey. The country saw output tumble due to maintenance at some of its key fields along with ongoing technical and operational problems.
Libya pumped 1.08mbpd in June, a fall of 40,000bpd from the previous month, the survey found. Technical issues as well as maintenance at some oil infrastructure pushed output lower.Almost 700,000bpd of the country’s crude output remains at risk due to its protracted civil war, according to state-owned National Oil Corporation, which is calling for the international community to intervene in the conflict.
No comments yet