Nigeria Economic Update (Issue 19)

Domestic oil production output increased to 1.82 million barrels per day (mbpd) in the month of April 20191. According to the global oil cartel, OPEC, Nigeria’s crude oil production rose by 5.3%, from 1.7mbpd reported in March 2019. Although the increase likely suggests less disruptions to major oil pipelines in Nigeria and is considered necessary to meet fiscal obligations, it positions Nigeria as a non-compliant OPEC member. Essentially, while Nigeria attempts to gradually step up to producing close to the 2019 budget benchmark of 2.3mbpd to allow for adequate budget funding, the country reneges on the quota of 1.69mbpd signed under the OPEC supply cut agreement. With major investments being undertaken in the oil and gas sector such as Pan Ocean Oil Corporation Limited’s infrastructure projects in gas pipeline, gas processing plant, and early production facility, crude oil production is expected to rise in the coming months. With Nigeria’s production being a negligible component of OPEC’s total production, non-compliance to the agreement should not destabilize the oil market.

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March 13, 2018 - 4:00 am
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