Oil Production Drops to 1.57m barrels

• Oil Production Drops to 1.57m barrels

Nigeria’s crude oil production dropped to 1.57 million barrels per day in December, according to the Organisation of Petroleum Exporting Countries (OPEC).

In the monthly oil report of the organisation, Nigeria, Africa’s largest crude oil producer, pumped 1.666 million barrels per day in the month of November and 1.57mbpd in December.

While Nigeria’s production quota stood at 1.75 million bpd, the nation continues to struggle with weak production despite 31.35 percent of the 2020 national budget expected to come from oil revenue.

“Nigeria is more sensitive about production than price. A lower oil output would affect the actualisation of budgeted revenue projections as oil revenue accounts for 31.35 per cent of the total revenue projected,” analysts at the Financial Derivatives Company Limited said in a recent note.

Nigerian National Petroleum Corporation (NNPC) last week said the nation is focusing on natural gas liquids and natural gas to better comply with OPEC production quota.

“You can produce condensate which is not part of the OPEC commitments. We are focusing our production to more gas-based reservoirs so that we can continue to grow our production while maintaining balance in the market,” General Manager, NNPC, was quoted as saying on the sidelines of the Atlantic Council Global Energy Forum in Abu Dhabi.

OPEC had projected a drop in global oil demand for 2020, therefore, mandating its producers to cap production to curb lower oil prices as non-OPEC suppliers are expected to disrupt the cartel strategy this year.

“Continued accommodative monetary policies, coupled with an improvement in financial markets, could provide further support to ongoing increases in non-OPEC supply,” the report said, adding that OPEC+ cuts remained essential in maintaining stability in the oil market.

OPEC puts the first quarter of 2020 demand at 29.19, slightly below 30.60 million recorded in 2019. The cartel projected 29.50 million bpd for the entire year.