By Udeme Akpan
Apparently in a bid to comply with the output quota of the Organisation of Petroleum Exporting Countries, OPEC, Nigeria’s oil output dropped 11.47 per cent year-on-year, YoY, in the second quarter of 2021 (Q2’21). But the decline also shows significant under-production against the quota.
In its July 2021 Monthly Oil Market Report, MOMR, obtained by Vanguard, the OPEC disclosed that on the average, the nation produced 1.343 million barrels per day, mb/d, in Q2’21 compared to 1.517 mb/d produced in Q2’20. This also compares negatively with the OPEC quota of 1.4 mb/d.
Specifically, the report has it that the country produced 1.372 mb/d, 1.344 mb/d and 1.313 mb/d, in April, May and June, 2021 respectively, compared to 1.705 mb/d, 1.436 mb/d and 1.411 mb/d, produced in the corresponding months of 2020.
At the Q2’21 average output the country requires about 500 mb/d output on condensate to meet its 2021 budgetary target of 1.8 mb/d. But currently the estimated condensate output is put at 400 mb/d, indicating a likely significant shortfall.
However, the shortfall may not affect revenue estimates since the 2021 oil revenue was based on oil price of $40 per barrel, while actual price in recent weeks have hovered above $70 per barrel.
Meanwhile the OPEC report, which painted a bright prospect for the oil market in the remaining part of 2021, stated: “World oil demand growth in 2021 is forecast at 6.0 mb/d, unchanged from last month’s assessment, although there have been some regional revisions. Total oil demand is projected to average 96.6 mb/d.
“The Q1’21 was revised lower, amid slower than anticipated demand in the main Organisation for Economic Co-operation and Development (OECD), OECD consuming countries. This was counter-balanced by better-than-expected data from OECD Americas in Q2’21, which is now projected to last through the Q3’21.
“Solid expectations exist for global economic growth in 2022. These include improved containment of COVID-19, particularly in emerging and developing countries, which are forecast to spur oil demand to reach pre-pandemic levels in 2022.”