Nigeria produced 1.343 million barrels per day in the second quarter of 2021, according to the Organisation of Petroleum Exporting Countries’ Monthly Oil Market Report (MOMR), compared to 1.517 mb/d in the second quarter of 2020. This is in contrast to the OPEC limit of 1.4 mb/d.
According to the report, Nigeria produced 1.372 million barrels per day, 1.344 million barrels per day, and 1.313 million barrels per day in April, May, and June of 2021, respectively, compared to 1.705 million barrels per day, 1.436 million barrels per day, and 1.411 million barrels per day in the same months of 2020.
The country’s average output in Q2’21 requires around 500 mb/d of condensate output to reach its 2021 budgetary objective of 1.8 mb/d, but condensate output is currently anticipated at 400 mb/d, indicating a possible substantial shortfall. The shortfall may not impact income projections because the 2021 oil revenue was based on a $40 per barrel oil price, while actual prices have stabilised around $70 per barrel in recent weeks.
Excerpts from the OPEC report on the prospect of the global oil market in the remaining months of 2021: “World oil demand growth in 2021 is forecast at 6.0 mb/d, unchanged from last month’s assessment, although there have been some regional revisions. Total oil demand is projected to average 96.6 mb/d.”
“The Q1’21 was revised lower, amid slower than anticipated demand in the main Organisation for Economic Co-operation and Development (OECD), OECD consuming countries. This was counter-balanced by better-than-expected data from OECD Americas in Q2’21, which is now projected to last through the Q3’21.”
“Solid expectations exist for global economic growth in 2022. These include improved containment of COVID-19, particularly in emerging and developing countries, which are forecast to spur oil demand to reach pre-pandemic levels in 2022.”
OPEC members have had to undergo a year of collective crude oil supply cuts to help control supplies and keep prices high. While this has helped to stabilise oil prices, member countries’ revenues have suffered as a result of their inability to put out as much volume as they would like.
Nigeria’s present export volume is estimated to be around 1.4 million barrels per day, far lower than the 1.8 million barrels per day it has averaged over the years and far below its 2.5 million barrels per day production capability.