Crude Oil Production Drop In Nigeria, Libya

 

Terror activities by Boko Haram in Nigeria and Islamic State in Libya have led to decline in crude oil production, a crude oil productio survey carried out by Platts indicated in a report.

The report also revealed a significant drop of crude oil production in the Organization of the Petroleum Exporting Countries (OPEC) member states. Libya and Nigeria are OPEC members from the African continent.

Nigerian output dipped by 40,000 b/d to 1.86 million b/d as a slightly shorter loading program was exacerbated by the declaration of force majeure on Brass River crude exports on December 24. Trading sources said exports of the grade restarted in the latter part of this week.

December also saw the restart of the 125,000 b/d Kaduna refinery and the two refineries at Port Harcourt with combined nameplate capacity of 210,000 b/d.

By early January, all four of the country's plants were online for the first time since July last year, although utilization rates were unclear. Nigeria's total nameplate capacity is 445,000 b/d.

A United Nations (UN)-brokered deal between Libya's two rival governments in late December has so far failed to bring about greater political stability, as shown by the recent spate of attacks carried out by the so-called Islamic State.

Libyan production in December averaged 380,000 b/d, largely unchanged from November and still below the 480,000 b/d achieved in March, which was its strongest month in 2015.

Libya's oil output continues to languish at a fraction of the 1.58 million b/d level pumped before the 2011 uprising due to instability in the country and technical difficulties at oil fields.

Crude prices, meanwhile, remain under pressure from oversupply and brimming stocks, and are trading at multi-year lows.

Brent futures sank as low as $27.10/barrel on January 20, the lowest level since early November 2003. OPEC's own crude basket, representing streams from all 13 member countries, stood at $22.48/b on January 20.

OPEC is not due to meet until June 2, but the relentless fall in prices has renewed calls for an emergency meeting from the group's more cash-strapped members. Venezuelan President Nicolas Maduro earlier this week called for an emergency meeting to stabilize oil prices.

So far, there has been no sign from Saudi Arabia that it is ready to abandon the market share strategy that it persuaded OPEC to adopt in November 2014.

Saudi Oil Minister Ali Naimi told an event in Riyadh on Sunday he was optimistic that world oil markets would stabilize, that oil prices would improve and that major producing countries would cooperate with each other.

When OPEC decided in late 2014 to defend its market share rather than reduce output, it maintained the 30 million b/d ceiling that had been in place since the beginning of 2012.

At the group's recent meeting on December 4, however, ministers failed to agree on a ceiling level, thus removing the remaining notional constraint on freewheeling production.

1 comment

  • Maragret Sharpless
    Maragret Sharpless Saturday, 13 February 2016 06:20 Comment Link

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