Nigeria and South Sudan will request that their oil output quotas be raised, when ministers from the OPEC/non-OPEC producer coalition gather later Monday to discuss extending their supply cut accord, sources told S&P Global Platts.
Both countries have seen their production surge in recent months to levels far in excess of their agreed caps, but may receive a cool reception to their requests, with the coalition seeking to maintain production discipline. “I feel it is complicated,” one delegate who isn’t from either country said on condition of anonymity. “We will see.”
Nigeria, Africa’s largest producer, pumped 1.86 million b/d in May and 1.95 million b/d in April, according to Platts’ monthly survey of OPEC production, while its quota under the deal was 1.69 million b/d. Its representative to the OPEC meeting, the petroleum ministry’s permanent secretary Folasade Yemi Esan, is scheduled to hold a press conference Monday morning where she will outline the country’s case.
Nigeria has previously disputed production figures from some secondary sources used by OPEC to track compliance, including Platts, saying that some of the volumes include condensate, which is not covered under the quota.
But much of Nigeria’s recent surge comes from the start-up of the deepwater 200,000 b/d Egina field, which came online December 29. “There are other existing projects that will increase production, as well, over the next six to 24 months,” a Nigerian delegate told Platts on condition of anonymity, conceding that other ministers may not be amenable to the request.
Nigeria had been exempt during the first two years of the OPEC/non-OPEC production cuts, due to the volatility of its output stemming from disruptions in the Niger Delta, only receiving a quota for the current round of cuts, which went into force in January. As for non-OPEC South Sudan, its petroleum and mining ministry reports production of about 180,000 b/d, above its quota of 130,000 b/d.
The country, which has seen its oil sector suffer from years of war, recently appointed Awow Daniel Chuang as its new minister of petroleum and mining, after President Salva Kiir reshuffled his cabinet. Its oil prospects have brightened following a peace pact signed by Kiir and rebel faction leader Riek Machar in September, with the government aiming to reach 350,000-400,000 b/d by 2020.
OPEC and its non-OPEC allies committed in December to 1.2 million b/d in supply cuts through the end of June. Key members of the coalition have endorsed a nine-month extension that will be considered at the meeting. OPEC ministers will gather Monday, with non-OPEC ministers joining talks on Tuesday. Platts.com
Pix: Opec headquarters, Vienna
