Nigeria oil production increase a problem for OPEC members

Increase in Nigeria’s oil production may reduce pressure on premium benchmark prices and cause a problem for OPEC members, according to an expert. An internationally acclaimed energy expert, Mr. Vincent Lauerman, who is the President of the Calgary-based consultancy, Geopolitics Central said that Nigeria’s oil production rebounded to 1.9 million barrels per day in October, which is about 80,000 barrels per day more than its OPEC quota.

The energy expert, who pointed out that Nigeria’s oil production was a “nasty mess at midyear,” as the insurrection in the Niger Delta drastically cut the country’s crude oil production and caused it to lose its position among African oil producers, said that increased production could lower crude oil prices.

Lauerman said: “Now, much to my surprise, the country may be turning the corner, with the Niger Delta insurrection on the decline and oil production on the rise. If Nigeria’s oil production continues to increase, it could lower crude oil prices and put the country on the wrong side of the Organization of the Petroleum Exporting Countries (OPEC).”

According to him, International Energy Agency (IEA) had disclosed that Nigeria’s oil production slipped to 1.68 million barrels per day in July 2009, which is about 46 per cent below its total capacity, including 500,000 barrels per day of shut-in, compared with 1.7 million barrels per day for Angola.

The international energy expert, who pointed out that Nigeria’s onshore production had fallen to levels not seen since the 1960s, said that since the end of 2005, militant groups under Movement for the Emancipation of the Niger Delta (MEND) had attacked oil infrastructure in the Niger Delta, which had reduced oil production and revenues.

Tags:  members, Nigeria, oil, OPEC, production