Leadership (Abuja)

Nigeria: Oil Theft in Nigeria Cuts OPEC Output to 16-Month Low

The perennial problem of crude oil pipeline vandalism and theft plaguing the country is currently weighing down on the Organisation of Petroleum Exporting Countries' (OPEC's) projected crude oil output, which reached an all-time low since October 2011.

A survey of shipping data and sources at oil firms, OPEC and consultants conducted by Reuters indicated that crude oil supply from the OPEC is set to average 30.18 million barrels per day (bpd), down from 30.42 million bpd in February.

Supply in Nigeria has edged lower in the last few months following disruptions by oil spills, flood and theft. Output of Bonny Light crude was under force majeure for part of the month after a pipeline leak.

Besides Nigeria, unrest in Libya and Iraqi export disruptions are also whittling OPEC supplies.

The survey indicated that top OPEC exporter, Saudi Arabia, is still keeping a lid on output. Oil, trading at $109 a barrel, is above Saudi's preferred level of $100, although prices have fallen two per cent this year following concern about the global economic outlook.

"I think that Saudi Arabia is pretty happy going into the second quarter at this level of output and price, although we should expect them to react very quickly if they need to," said Samuel Ciszuk, senior adviser at the Swedish Energy Agency.

OPEC's March output will be the lowest since October 2011 when the group produced 29.81 million bpd, according to Reuters' surveys. OPEC output is the closest it has been to its supply target of 30 million bpd since it took effect in January 2012.

OPEC is scheduled to meet on May 31 in Vienna to review its output policy for the second half of the year. At its last meeting in

December, OPEC kept its target unchanged, although Saudi has adjusted supply depending on demand.

Saudi Arabia has kept supply to market little changed at 9.23 million bpd this month, according to the survey. It trimmed output in the last two months of 2012, in a reduction that supported oil prices.

Industry sources still expect an increase in Saudi output in the second quarter, due to growth in Asia and a seasonally higher need for crude in domestic power plants, which is likely to boost OPEC supply overall.

Brent crude, which hit a 2013 high of $119.17 a barrel on February 8, was trading just above $109 yesterday.

Iraq, Libya and Nigeria have been the drivers of the decline in OPEC's output this month.

Iraq, the world's fastest-growing exporter, has shipped less from its southern port due to bad weather and problems including a leak from a pumping station. Exports of Kirkuk crude remain restrained by a dispute between the central government and the Kurdistan region over payments.

Crude output has remained under pressure in Libya, where oil installations have become a focal point of protests. Industry sources say output has been affected at fields, including Conoco's Waha.

Iran's crude exports have edged lower in March to around 1.15 million bpd from an upwardly-revised 1.2 million bpd in February, according to the survey.

US and European sanctions led to a sharp drop in Iranian exports last year, while in March some Asian customers have bought less crude due to maintenance at refineries.

Iranian shipments are down from a post-sanctions high of at least 1.4 million bpd in December.

Ads by Google

Copyright © 2013 Leadership. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.