Oil Output On The Rise

NIGERIA’S crude oil output bounced back from two months consecutive drop which saw it lose its number one slot as Africa’s top producer to Angola, to close at 1.9 million barrels per day in the month of July, a Platt survey revealed.

The country’s oil production also showed signs of improvement in the first few days of August with an average of more than 2.1 million barrels per day (bpd).

Nigeria’s production got a boost from restored shut in volumes, increasing by 100,000 bpd in July to average 1.9 million bpd over the month.

However, indications are that the volume of crude oil still shut in owing to attacks by militants as well as technical issues at fields in the Niger Delta stood at 1.533 million bpd, more shut in volumes than has ever been recorded in peace time anywhere.

In May, Nigeria’s output stood at 1.86 million barrels per day, while production for June dropped to 1.8 million barrels per day.

Angola’s output has risen steadily as new fields off the country’s coast come on stream and this is on course to climb by 30,000 barrels per day in July.

The Organisation of the Petroleum Exporting Countries’ (OPEC) 13 members boosted their collective crude oil production by 300,000 barrels per day (bpd) in July to average 32.77 million bpd over the month, according to a Platts survey of OPEC and oil industry officials just released.

Excluding Iraq, the 12 members bound by output agreements produced an average 30.31 million bpd in July, or 330,000 bpd more than June’s 29.98 million bpd and 637,000 bpd in excess of their 29.673 million bpd target, the survey showed.

“It’s notable that suddenly, with output rising, OPEC officials are concerned about adherence to quotas and oversupply,” said Platts Global Director of Oil John Kingston. “However, as we look toward the fourth quarter of the year, barring a more significant decline in demand, the world is going to need OPEC oil to avoid a larger inventory draw than is normal for the fourth quarter. Pulling inventories at that rate would be very bullish for prices.”

Increases totalling 390,000 bpd from Iran, Kuwait, Nigeria and Saudi Arabia were partly offset by declines in Libya and Iraq.

The biggest single increase came from Saudi Arabia, which delivered on its promise to boost output to 9.7 million bpd in July from 9.45 million bpd in June.

Libyan volumes, already down in May and June because of repair work at Total’s al-Jurf field, fell further in July as maintenance work got underway on a pipeline linking the Waha and Defa oil fields.

Libya’s top oil official, Shokri Ghanem, who heads the National Oil Corporation, told Platts last week that the work on the pipeline and the field would continue for some weeks.

Iraqi volumes fell by 30,000 bpd to 2.46 million bpd. OPEC ministers meet September 9 in Vienna. International crude futures prices have fallen by some 20 per cent from records above $147/barrel in early July and some ministers have talked of possible intervention if prices continue on their sharp downtrend.

Iranian oil minister Gholamhossein Nozari said earlier this month that if prices continued to fall, the Vienna meeting would focus on closer adherence to production targets, while his Qatari counterpart, Abdullah al-Attiyah, said OPEC was ready to intervene to restore market balance if it felt supply was outstripping demand.