Still struggling with its oil production quota, the Organisation of Petroleum Exporting Countries (OPEC) yesterday revealed that Nigeria reported a paltry 1.024 million barrels per day production in May, a multi-year low.
However, while direct country reporting of total barrels drilled was roughly 1 million bpd, secondary sources, according to OPEC, indicated that the country produced 1.258 million bpd.
In all, with the latest figure released by the OPEC, it means that Nigeria’s underperformance was as high as 700,000 barrels per day for the month, although the cartel’s total allocation to Nigeria exceeded 1.75 million bpd for the month.
The 1.24 million bpd production was about 195,000 bpd less production when compared with April’s total of 1.219 million bpd, OPEC said in its Monthly Oil Market Report (MOMR) released Tuesday.
Despite assurances by the various government agencies, what the OPEC figures imply is that rather than improve, the country’s oil production has actually deteriorated in the past months.
Fingering massive theft as one of the reasons for its inability to meet its quota, the federal government had also months ago, deployed heavy military presence in the Niger Delta to curb the menace.
But the OPEC data has now confirmed that the action has not made any difference, as nothing appears to have changed since the rejigging of the security arrangement in the region.
On the economy, OPEC said that Nigeria’s real Gross Domestic Product (GDP) advanced by 3.1 per cent y-o y in Q1, 2022, following almost 4 per cent y o-y growth in the prior period.
It stated that this was driven by a solid performance in the information and communication industry, adding that the non-oil sector grew by 6.1 per cent y-o-y in 1Q22, faster than 4.7 per cent Q4, 2021.
However, it noted that Nigeria’s inflation outlook has deteriorated in recent months, reaching 16.8 per cent y-o y in April 2022, up from 15.9 per cent y o-y in March.
” Like most African countries, Nigeria’s economy is grappling with rising food prices since it is largely dependent on agricultural imports, especially grains.
” Also, increasing diesel prices and the ongoing dollar shortage contributed to the upward trend in inflation,” it said.
OPEC said that the pace of growth may flatten amid fuel and power shortages, low water levels and higher borrowing costs for corporations and households following a 150 basis point increase in the policy rate by the central bank in May.
Meanwhile, speaking at the MedGas Event Dinner in Athens, Greece yesterday, OPEC Secretary General, Sanusi Barkindo, said that the world economic growth in 2022 has been revised down by the cartel to 3.5 per cent from 3.9 per cent in previous assessments.
“World oil demand in 2022 is forecast to increase by 3.4 mb/d y-o-y, representing a downward revision of 0.3 mb/d. Non-OPEC liquids supply growth in 2022 was revised down by 0.3 mb/d y-o-y to 2.1 mb/d.
“Against the backdrop of a fragile situation for the global economy, oil market stability is absolutely essential. For this reason, OPEC’s cooperation with 10 non-OPEC oil producing countries under the ‘Declaration of Cooperation’ is absolutely pivotal,” he said.
Signed on 10 December 2016, the ‘Declaration of Cooperation’ between OPEC and 10 non-OPEC Producing Countries is a pioneering framework for multilateral energy cooperation.
Barkindo said that the declaration had enabled the oil industry to withstand and recover from both the severe oil market downturn of 2014-2016 and the unprecedented oil market contraction following the outbreak of the COVID-19 pandemic.
On the energy transition, he reiterated that in recent years, public discourse around energy, climate and sustainable development had become noisier and more forceful.
Unfortunately, Barkindo argued that the conversation has become less global and inclusive, with some voices all but excluded, saying the narrative is often overtaken by emotion, with rational discussions based on facts, hard-data and science, taking a back seat.
“Our industry is at an inflection point and has never before faced so many challenges across multiple fronts in its long history. Put simply, we are under siege.
“In the courts, there are currently over 1,200 litigation cases against oil companies worldwide. Environmental NGOs, investors and even some corporate boards are pressuring oil companies and governments to pursue aggressive policies and initiatives that could, in the end, be more disruptive than productive for the global energy industry, especially given current concerns related to energy security.
“We need to be cognisant of how oil and gas industry investments are being impacted by Environmental Social Governance (ESG) requirements and the climate disclosure drive from the financial community.
“ESG criteria can present a series of questions to investors. As several commentators have noted, there is no universally accepted objective and rigorous framework for ESG,” he said.