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Even though the West African country has typically produced more oil than allowed under the OPEC+ production cut agreement, Nigeria has plans to boost production by about a quarter of a million barrels per day over the next two years.
The production increase will come from the Nigeria Petroleum Development Corporation, a subsidiary of the national oil company, NNPC. NPDC’s group managing director Mele Kyari said this week that the company, which currently pumps some 260,000 bpd, will boost this to 500,000 bpd by 2022. The additional output, Kyari said as quoted by local media, will go towards satisfying domestic oil demand.
“Today, NPDC has the highest number of rigs running in this country. Five rigs are running at the same time adding value and delivering major projects which will ultimately contribute towards the production of the 500,000 per day target,” the official said as quoted by Punch.
Nigeria, along with Iraq, was the worst-performing member of OPEC+ in the production cuts, which drew the ire of cartel leader Saudi Arabia to the point of demanding that the two undertake deeper cuts to compensate for their under compliance. Both have assured Saudi Arabia and fellow OPEC members they will do so, but the Kingdom is keeping the pressure on.
Related: Saudi Oil Minister: Oil Demand Could See A 97% Recovery By The End Of 2020
OPEC+ laggards cost the group some 2.3 million in cumulative excess production between May and July, according to a report by Argus. Yesterday, at a meeting of the joint ministerial committee that oversees compliance, the members of OPEC+ decided that all underperformers should submit plans to tackle the compensation cuts by August 28 at the latest.
Nigeria’s average daily stood at 1.37 million barrels last month, according to OPEC’s latest Monthly Oil Market Report. This was down by 38,000 bpd from June, and below the 1.41 million bpd it was allowed to produce under the OPEC+ agreement—Nigeria’s first success in meeting its quota since the agreement took effect in May.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.