Nigeria’s crude oil production fell to a record low of 1.57 million barrels per day last month, the Organisation of Petroleum Exporting Countries (OPEC) has said.
The producer group said in its monthly oil market report published on Wednesday that the country’s oil output stood at 1.66 million bpd in November, based on direct communication.
The group uses secondary sources to monitor its oil output, but also publishes a table of figures submitted by its member countries.
Nigerian crude production in December was in line with its quota of 1.77 million bpd, according to secondary sources.
“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.
OPEC and its partners, including Russia, agreed to cut output by a further 500,000 bpd from January through March 2020, on top of their previous cut of 1.2 million bpd.
According to S&P Global Platts, starting this month, Nigeria’s quota drops to 1.75 million bpd under the OPEC+ coalition’s agreement to deepen its production cuts through March.
Last week, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), said the country was shifting its upstream work towards natural gas liquids and natural gas, to better comply with its crude production quota under the OPEC+ agreement.
“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,” he was quoted as saying on the sidelines of the Atlantic Council Global Energy Forum in Abu Dhabi.
OPEC said in the report that a rise in oil demand growth this year would be offset by a sharper increase in non-OPEC supply.
“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.
The group said demand for its crude would average 29.50 million bpd in 2020, which is 60,000 bpd above what it produced in December.
However, demand for its crude from January to March this year, which is the duration of its current cuts, is predicted to average 29.19 million bpd.
Demand for OPEC crude averaged 30.60 million bpd in 2019.