Rising oil production from last month helped shore up the overall output from the Petroleum Exporting Countries (OPEC) providing providing a cushion for the Organization amidst cutbacks from other producers
According to a Reuters survey, oil production from OPEC only witnessed a minor decline in June 2023.
This was primarily due to Nigeria and Iraq mitigating the impact of production cutbacks implemented by other countries. Despite a broader OPEC agreement and voluntary reductions by several members to stabilise the market, Nigeria continued to see modest growth in its exports, although its current production remains below the limits set by the OPEC deal according to a Reuters report.
OPEC pumped 28.18 million barrels per day (bpd) in June 2023, which was 50,000 bpd from May’s revised figure. The survey also notes that several members of OPEC, which includes OPEC and allies such as Russia, had in April pledged voluntary cuts on top of those made in late 2022 as the economic outlook worsened.
In May, six OPEC members agreed to cut output by a further 1.04 million bpd, adding to about 1.27 million bpd of reductions already in place. These curbs remain in place for June.
Last month, Nigeria regained its position as the top crude oil producer in Africa for May 2023, based on data from OPEC. According to OPEC, Nigeria produced 1.184 million barrels of crude oil per day during the month, according to OPEC.
In other oil-producing countries, Libya produced 1.158 million bpd, Angola produced 1.111 million bpd, and Algeria produced 962,000 bpd.
In April 2023, Nigeria experienced its first decline in crude oil production, with OPEC reporting a daily output of 999,000 barrels.
In addition to declining oil production, Stanley Akhile, operations team Lead at Midwestern Oil and Gas Company Limited, told Reuters that the dip in oil production in April is due to the current sectional replacement on the Forcados line.
“Because of the sectional replacement at the oil terminal, virtually all the injectors in the Forcados line are down. That is why there has been a drop in production. Injectors are not pumping into the Forcados line. Some have shut down their flow station because their tanks are filled up because of the sectional replacement on the Forcados line,” he said.
Sectional replacements at oil terminals refer to replacing a pipeline or storage tank section that has become damaged or worn out. It involves cutting out the damaged section of the pipeline or tank and installing a new section in its place.
“The Forcados line has not been replaced since it was commissioned. It has punctures due to vandals. Some sections of the Forcados line are already worn-out. Irrespective of the maintenance carried out on the terminal, it will not sustain. There will be leakages on those points,” Akhile said.
Haitham al Ghais, OPEC Secretary General during his address at the Energy Asia conference in Kuala Lumpur, Malaysia on June 26, said, “OPEC sees global energy demand increasing by 23 percent through 2045, and he sees no credible way to address this without utilising all available energy sources, and with energy market stability as a guiding light.
“OPEC projects global oil demand rising to 110 million barrels a day by 2045, and oil still makes up about 29 percent of the energy mix by then. He said between now and 2045, oil investments will require up to $12.1 trillion, or over $500 billion each year.” He said.
He further added that “oil producers recognize the need to continually reduce emissions and decarbonize, as well as invest in global best practices and cutting-edge, best-in-class technologies like carbon capture utilisation and storage, clean hydrogen technologies, and the circular carbon economy.”