The Organisation of Petroleum Exporting Countries on Wednesday raised Nigeria’s crude oil production quota for September 2022 to 1.83 million barrels per day, the same day Brent, the global benchmark for crude, dropped in price.
According to data obtained from OPEC, the 13-member organisation increased Nigeria’s oil production quota marginally from 1.826mbpd in August to 1.83mbpd in September.
This came as industry figures seen in Abuja indicated a drop in the cost of crude oil, as Brent fell by 2.36 per cent, shedding $2.37 to close at $98.17/barrel as at 5.10pm Nigerian time.
It was also observed that crude oil grades in the OPEC basket dropped in price, losing $1.94 or 1.82 per cent, to close at $104.86/barrel at 5.13pm.
Oil prices have stayed above $100/barrel for months due several industry concerns such as the war in Ukraine by Russia.
However, Nigeria has not benefited much from the price increase because of its persistent inability to meet its monthly oil production quota approved by OPEC.
Figures obtained from OPEC showed that while the OPEC quota for Nigeria in June 2022, for instance, was 1.772mbpd, the country could only produce 1.158mbpd.
The country’s production in June, was, however, higher than its production in the preceding month of May 2022 by 134 million barrels per day.
It was gathered that Nigeria’s oil production in May 2022 was 1.024mbpd, but this moved up to 1.158mbpd in June, though far lower than the 1.772mbpd production quota by OPEC.
Meanwhile, the organisation stated that the latest crude oil production quota for September 2022 was arrived at during the 31st OPEC and non-OPEC Ministerial Meeting.
It said the meeting noted the dynamic and rapidly evolving oil market fundamentals, necessitating continuous assessment of market conditions.
“The meeting noted that the severely limited availability of excess capacity necessitates utilising it with great caution in response to severe supply disruptions,” the organisation stated in its report on the meeting.
It added, “The meeting noted that chronic underinvestment in the oil sector has reduced excess capacities along the value chain (upstream/midstream/downstream).
“It highlighted with particular concern that insufficient investment into the upstream sector will impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil producing countries, some OPEC member countries and participating non-OPEC oil producing countries.”
The oil cartel further said that Declaration of Cooperation conformity had averaged 130 per cent since May 2020, supported by voluntary contributions of some participating countries.
Emphasising the value and importance of maintaining consensus as essential to the cohesion of OPEC and participating non-OPEC oil producing countries, and in view of the latest oil market fundamentals, the participating countries reached some decisions.
They decided to reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting held on April 12, 2020 and further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting of July 18, 2021.