FOR the second consecutive month, Angola has beaten Nigeria to emerge Africa's highest oil producing nation, a development which underscores Nigeria's dwindling fortunes in the sector and Angola's steady rise as an oil producer of note on the continent.

May, 2008 production figures released by the Organisation of Petroleum Exporting Countries (OPEC) showed that Nigeria produced 1.89 million barrels per day while Angola produced 1.90 million barrels per day during the period under review.

Nigeria has an installed capacity to produce 3.0 million barrels per day, while Angola's capacity is reportedly put at 2.0 million barrels per day.

Nigeria's production capacity is largely blighted by the activities of militants in the Niger Delta which accounts for close to 100 per cent of the countries hydrocarbon resources.

The militants are demanding greater control of the hydrocarbon resources and to push their demands, in the last three years, they have heightened a terror campaign including bombings, arson, pipeline vandalism and hostage-taking which have resulted in the shut-in of over 1.0 million barrels of crude oil per day.

OPEC production recovered in May to 32.24 million b/d, an increase of 370,000 b/d from April's 31.87 million b/d, a Platts survey of OPEC and oil industry officials showed June 10.

Production from the 12 members bound by output agreements rose 260,000 b/d to 29.75 million b/d in May, from 29.49 million b/d in April, the survey showed.

A sharp drop in Nigeria's production was the main reason for the lower April numbers. Nigeria's output, estimated at 1.86 million b/d in May, showed some recovery but was still well below pre-April levels of more than 2 million b/d. The biggest volume increases in May came from Saudi Arabia and Iraq.

Saudi output was estimated at 9.24 million b/d, up 140,000 b/d from April's 9.1 million b/d. Saudi Arabia said last month its June production would average 9.45 million b/d.

Iraqi volumes, which averaged 2.38 million b/d in April, rose to 2.49 million b/d in May, an increase of 110,000 b/d. Other smaller increases came from Angola, Ecuador, Kuwait, Qatar, the UAE and Venezuela. The increases were partly offset, however, by output drops in Iran and Libya.

The survey showed the OPEC-12 exceeding their 29.673 million b/d target by 77,000 b/d. A senior OPEC delegate said June 9 that OPEC ceilings and quotas had become largely irrelevant and that OPEC had a "tacit" understanding that those members capable of boosting crude production should supply as much oil as world oil markets needed. Some countries were already raising output, he said.

"It's clear that with non-OPEC output continuing to sag, and world demand staying flat regardless of high prices, that any additional supply most likely must come from OPEC," said Platts Global Director of Oil John Kingston.

"The International Energy Agency report released Tuesday morning says the world drew stocks in April, and that's not supposed to happen. Stocks are supposed to build in the second quarter, in anticipation of a fourth quarter stock draw.

But with OPEC spare capacity down to 2 million b/d, according to the IEA, its ability to put much more oil on the market looks severely constrained."