According to Nigeria’s National Oil Company, the Nigerian National Petroleum Corporation (NNPC), OPEC’s largest African producer, lost an estimated $487.5 million in oil earnings in December 2021 due to force majeure and sabotage, which resulted in a drop in production of 6.596 million barrels of oil.
Because of the drop in Nigerian oil production, the country missed out on an average oil price of $75 per barrel, losing roughly half a billion dollars. As part of the OPEC+ monthly rise in quotas, Nigeria has been dealing with force majeure and the inability to ramp up output. Its production is roughly 300,000 barrels per day (bpd) less than what the OPEC+ agreement calls for.
Nigeria’s oil and gas sector contributes for over 10% of the country’s GDP, with petroleum exports accounting for roughly 86% of the country’s total export revenue. Nigeria is not only losing oil profits, but its reluctance to expand production is also contributing to a tighter-than-expected global oil market.
According to OPEC’s Monthly Oil Market Report, Nigeria’s crude oil output declined by 43,000 barrels per day from November to 1.338 million barrels per day in December 2021. (MOMR). Nigeria’s required production for December under the OPEC+ agreement was 1.666 million barrels.
Due to under-production in Nigeria, Angola, and Malaysia, OPEC+ producers achieved total gains of 250,000 bpd last month, significantly below the permitted amount, and were 790,000 bpd below the group’s aim. Russia also pumped below its quota for the first time since the curbs were implemented in May 2020.