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OPEC gives condition for Nigeria’s oil production quota increase.

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OPEC gives condition for Nigeria’s oil production quota increase.      As reported in our previous newsletter published on the 1st of October 2021 “Trending Topics in the oil and gas industry”, it should be noted that OPEC increased oil production by 400,000 barrels per day every month and this oil production increase started in the month of August and because of this, Nigeria was in communication with OPEC for an increase in its oil production quota to about 2.2 million barrels per day even though the country didn’t meet the previously stated quota and is currently producing below its 1.74 million barrels per day quota due to technical challenges.   In response to the situation stated above the Organization of Petroleum Exporting Countries (OPEC) maintained that no country including Nigeria, which has under-performed in meeting its monthly oil quota allocation would have its baseline increased. The oil producers’ association maintained that it defies logic for Nigeria, which has routinely failed to fulfill its quota in recent months to request for an increase when it was clear that the country was having difficulty pumping its share of the liquid. A source at OPEC Secretariat, Vienna said that Nigeria had not met the condition which would warrant an increase in its baseline and by extension its monthly quota noting that until that requirement is met, it will be difficult to mull a production hike.     Nigeria has failed to achieve the existing crude oil supply limit granted it by OPEC, underperforming by 90,000 barrels per day in August or around 2.8 million barrels over the month, while asking for higher baseline. Its production of 1.43 million barrels per day was the lowest in five years. According to an OPEC document obtained by This Day, Nigeria which has the ability to produce two million barrels per day if all other factors are equal, fell short of its July figure of 1.520 million barrels per day.   Organization of Petroleum Exporting Countries (OPEC) giving Nigeria conditions means the organization is open to the country increasing her Production quota. Despite Nigeria’s previous failure in meeting up to the allotted Production quota, the country now feels it has tackled the factors that mitigated achieving the feat. With these development in play, Nigeria is in position to increase its quota of production as long as it meets with OPEC’s conditions.

           Source: This day, Nairametrics, Reuters.

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