Force Majeure Blamed as Nigeria, Libya Record Lowest OPEC Oil Outputs in December
……..S/Arabia, Angola recorded first and second highest respectively
By Chibisi Ohakah, Abuja
A survey has recorded Nigeria with the second-largest drop in the Organization of the Petroleum Exporting Countries (OPEC) oil output last December, even as the global cartel again undershot the rise planned under a deal with allies. OPEC attributes part of Nigeria challenge to a force majeure on exports from the Forcados crude stream.
The biggest decline — 100,000 bpd — was in Libya, another country exempt from OPEC supply curbs, which on Dec. 20 said it had declared force majeure on crude exports from two terminals, Zawia and Mellitah, according to the survey by Reuters
The biggest rise recorded against December came from OPEC’s top producer, Saudi Arabia, which, the report said, boosted output largely as promised according to the agreement.
The second-largest came from Angola, which exported five more cargoes in December, according to loading schedules. Output is still in long-term decline and Angolan compliance, at 315%, is among the largest in OPEC, the survey found.
United Arab Emirates (UAEs) and Algeria also followed through on their higher quotas, and exempt producer Venezuela pumped more as it halts a years-long decline in output.
The survey highlighted capacity constraints that are limiting supply as global demand recovers from the pandemic. OPEC reportedly pumped 27.80 million barrels per day in December, up 70,000 bpd from the previous month but short of the 253,000 increase allowed under the supply deal.
OPEC and its allies, a group known as OPEC+, are gradually relaxing 2020’s output cuts as demand recovers from that year’s collapse. But many smaller producers cannot raise supply and others have been wary of pumping too much in case of renewed COVID-19 setbacks, the survey found out
The OPEC+ agreement allowed for a 400,000 bpd production increase in December from all members, of which about 253,000 bpd is shared by the 10 OPEC members participating in the deal, OPEC figures seen by Reuters show.
With output undershooting the planned increase, OPEC’s compliance with its pledged cuts increased to 127% in December, the survey found, from 120% a month earlier.
OPEC+ met last Tuesday and agreed to proceed with another 400,000 bpd output increase in February, suggesting the lag between actual and pledged supply could widen further without larger producers compensating for shortfalls.
Generally speaking, the survey said production fell or did not increase in Congo, Equatorial Guinea, Nigeria, Libya and Iran, in many cases due to a lack of capacity to produce more or unplanned outages.