Minister of State for Petroleum Resources, Timipre Sylva has said that the country would be able to meet its OPEC production quota by the end of August.
Sylva, hinged his optimism on the plans by the country to boost security in its oil industry.
Nigeria is OPEC’s largest production laggard, consistently underperforming its production quotas—by a longshot—since the production cut deal went into effect. According to secondary sources, Nigeria’s crude production slipped in May—the last available data—to 1.262 million bpd. Its May production quota under the OPEC deal was 1.753 million bpd, a shortfall of nearly half a million barrels per day.
Nigeria has struggled for some time with vandalism and theft in its oil sector. Vows to clean up the industry have failed to restore Nigeria’s crude production capacity to its full potential.
“For us in Nigeria, we are at a low point. We are not able to meet our OPEC quota,” Nigerian Oil Minister Timipre Sylva told a media conference, although he stressed that soon they should be able to. “We have given ourselves just about a month to ensure that we can … we believe that by August we would see some improvement in security,” Sylva added.
Sylva also dispelled the notion that OPEC could turn on spare capacity and pump more, citing capacity concerns. “At this moment, there is little capacity that can be brought to the market.”
The perceived lack of spare capacity among many OPEC members has helped to keep oil prices high in recent months, despite lofty ambitions from the group regarding July production targets, which were set 648,000 bpd higher than their June targets and over a million bpd higher than the May targets—which they aren’t meeting either.
If Nigeria did manage to meet its August production target, it would make a huge difference in the oil markets.