Abuja – The Organization of the Petroleum Exporting Countries (OPEC) maintained yesterday that no country, including Nigeria, which has underperformed on meeting its monthly oil quota allocation, will see its baseline increased.
The group of oil producers insisted that it goes against common logic that Nigeria, which has still not met its quota in the past two months, would ask for an increase as it was obvious that the country was having difficulty pumping its share of the liquid.
A source at the OPEC secretariat in Vienna told THISDAY that Nigeria did not meet the condition that would justify an increase in its baseline and by extension of its monthly quota, noting that as long as this requirement does not is not met, it will be difficult to envisage an increase in production.
“Nigeria has not achieved the current supply adjustment. It is when it is exhausted that the demand for the increase will arise,” said OPEC’s main source.
Despite demand for a higher baseline in August, Nigeria failed to meet the crude oil supply quota allocated to it by OPEC, underperforming by 90,000 barrels per day (bpd) in August, or about 2.8 million barrels in the month. That made its production of 1.43 million barrels per day one of the lowest in five years.
In the same month, Nigeria, which potentially has the capacity to produce two million bpd, all other things being equal, fell from its July figure of 1.520 million bpd, according to a document from OPEC obtained by THISDAY.
In addition to infrastructure issues and technical difficulties, leading to closures, there have also been instances of community or worker protests, which continually disrupt operations, resulting in severe losses. Nigeria was still under-supplied to the tune of about 114,000 bpd per day in September.
THISDAY had reported that the Nigerian National Petroleum Corporation (NNPC) and its partners lost 6.035 million barrels of crude oil during emergency shutdowns in August during 32 such incidents at its facilities around the country. A breakdown of the losses, according to the document, indicated that the largest combined shortage of 1.62 million barrels came from Qua Iboe, with 200,000 barrels due to the shutdown in production resulting from the management of flares and the low pressure at the wellhead.
A month later, losses rose to 7.193 million barrels, the highest in months, mainly due to closures due to relentless repairs as well as, to a lesser extent, disruption resulting from protests by community workers and local workers. fires.
Oil Minister of State Chief Timipre Sylva and Nigerian National Petroleum Corporation (NNPC) Group Managing Director Mallam Mele Kyari recently projected that by the end of October or mid-November, things would return to normal.
Analysts attributed the problem to declining investment and lingering maintenance issues that continue to hamper Nigeria’s production due to multiple shutdowns, with the latest disruptions in 40 cases.
Meanwhile, as oil prices rise above $ 80 a barrel and fears about the global energy crisis grow, OPEC has dismissed insinuations by some observers that the coalition is not doing enough to stabilize the market.
The organization’s secretary general, Dr Sanusi Barkindo, told critics the fault lay elsewhere, explaining that the turbulence spreading in natural gas markets shows that the energy transition is hampering vital investments in supply.
Speaking at the Energy Intelligence Forum yesterday, Barkindo said the mismanagement of the energy transition is starting to have a negative impact on the industry, noting that the process could be better managed than it is currently. .
âThe energy transition is not being managed properly. And so we are starting to see the fallout,â Barkindo said at the event.
Barkindo argued that the group’s decision this week to gradually increase supplies, like last year’s agreement to cut production during the pandemic, shows its commitment to a sustainable market balance.
He argued that the fundamental problem in the energy sector lies in the “hysteria” that has gripped thinking about moving away from fossil fuels, reducing much-needed investments even in developing countries.
The OPEC coxswain added: “We call on the main polluters, the main emitters to take a break and work on sustainable solutions when they meet for the next round of climate talks in Glasgow next month. “