The Organisation of Petroleum Exporting Countries (OPEC) and its Russia-led partners have approved for Nigeria to increase its oil production quota to 1.72 million bpd up from its previous target of 1.70 million bpd in February and 1.68 million bpd in January.
This is based on the outcome of the 25th OPEC and NON-OPEC ministerial conference meeting.
Nigeria’s oil production was increased by 400,000 barrels per day in March, sticking with its plan of unwinding the remaining production cuts by the end of the year.
Nigeria missed its crude oil output target for January 2022, pumping 1.46 million barrels per day against a target of 1.683 million BPD as approved by the Organization of Petroleum Exporting Countries.
The Government, however, attributed Nigeria’s prolonged inability to meet its OPEC production quota to the spate of oil pipelines vandalism, delay in the full implementation of the Petroleum Industry Act, among others.
Now, the increase of Nigeria’s oil production quota gives more room for the Nigerian government to profit, but the ability to meet it is questionable given recent trends.
What you should know
In the meeting, it was disclosed that the production quota will take effect from March 2022. Angola, the other African country got 1.35 million barrels per day for the production quota.
Saudi Arabia topped the list with a 10.331 million barrels per day quota. The organization, also, in its statement said it has reviewed its production to 41.3 million barrels per day saying while 10 OPEC nations are expected to produce 25.06 million barrels per day.
In a statement, it said it reiterated the decision of the 10th OPEC and non-OPEC Ministerial Meeting on April 12, 2020, and further backed it in following meetings, citing current oil market fundamentals and consensus on the future.
It reaffirmed the 19th meeting’s production adjustment plan and monthly production adjustment method, as well as the decision to increase monthly total production by 400,000 million BPD in March 2022.
OPEC+ reiterated saying “the critical importance of adhering to full conformity and the compensation mechanism, taking advantage of the extension of the compensation period until the end of June 2022”.
It stated that compensation plans should be filed following the 15th meeting’s declaration and that the next meeting will take place on March 2.