NIGERIA’S crude production has appreciated in the last two months following government directives that oil firms should increase output from the deep offshore fields.
The Guardian source said since November last year, crude oil production has increased to the point that Nigeria is now meeting its daily production quota as dictated by the Organisation of Petroleum Exporting Countries (OPEC).
“Nigeria is now meeting its production of 2.1 million barrels per day. Production allocation is now tilted more to the offshore fields than onshore”, the source said.
According to him, the improvement in output has also affected the Nigerian National Petroleum Corporation (NNPC) crude oil lifting from its partners’ terminal as vessels are allocated for same purpose.
The Guardian source explained that since December last year, NNPC has not defaulted in crude oil lifting and the output so lifted has improved representing the equity crude of the government through the NNPC.
“NNPC is now lifting between 950,000 barrels and one million barrels per day into the international market, while the balance goes to the partners, especially the foreign multi-national companies which also invested in the business,” he explained.
The source said production actually went down at the peak of the crisis in the Niger Delta and theft of oil in the region took lifting far lower than the 2.1million barrels OPEC mark.
On the aggregate, the government, through the NNPC holds 57 per cent in oil and gas exploration and production in the country while the balance goes to the private oil companies.
The Guardian also gathered that apart from crude oil which falls within the control of OPEC, Nigeria is also producing condensate, a light crude grade which is not counted as part of the nation’s OPEC quota in a large volume for export and increases the revenue profile of the government from the oil sector.
It was also gathered that those deep-water fields in the portfolio of Shell group, Total, ExxonMobil and Agip are doing very well to complement the loss in the shallow and onshore locations.
The Guardian source said unlike what happened in most part of last year when contract for oil lifting was deferred several times, the situation has changed since mid-November 2007.
Experts said that with this development and the high crude oil price in the international market, the country would surely be better for it.
Following the crisis in the Niger Delta region, the country is losing between 700,000 barrels and one million barrels of crude per day as a result of drop in production by the oil companies.
The Federal Executive has predicated the 2008 budget on $53.8 per barrels but the National Assembly may have raised the baseline to $59 per barrel.
According to OPEC price survey, its crude sold for $83.84 per barrel yesterday while the U.S. crude closed at $86.11 per barrel and the London Brent, $87.28 a barrel.
Nigeria has capacity for three million barrels per day output and reserve level of over 35 billion barrels.
OPEC at its last meeting in Abu Dhabi, United Arab Emirates (UAE) reviewed the oil market outlook, including the overall demand/supply projections for the year 2008, in particular the first and second quarters and observed that market fundamentals have essentially remained unchanged, with the market continuing to be well supplied and commercial crude/product stocks remaining at comfortable levels in future.
In a statement issued at the end of the meeting, the ministers observed, with concern, that world oil prices remained volatile mainly due to the perception of market tightness by players, exacerbated by non-fundamental factors, including the heavy influx of financial funds into commodities and speculative activity in the markets, while geo-political developments have contributed to price volatility.
The statement said the conference decided to leave OPEC production unchanged for the time being. The conference again emphasised the organization’s determination to take every measure deemed necessary to keep market stability through the maintenance of supply and demand in balance.
“The conference unanimously agreed that members, Angola and Ecuador, should have a production allocation of 1.9 mb/d and 520,000 b/d, respectively.” OPEC is pumping about 31million barrels of crude oil daily into the international market.