OPEC's August Output Quota Compliance 53%, Unchanged From July, IEA Says

http://www.bloomberg.com/news/2010-09-10/opec-s-august-output-quota-compliance-53-unchanged-from-july-iea-says.html

http://www.bloomberg.com/news/2010-09-10/opec-s-august-output-quota-compliance-53-unchanged-from-july-iea-says.html

OPEC’s compliance with record supply cuts was unchanged in August as increased output from Angola and Iran offset lower production from Nigeria and the United Arab Emirates, the International Energy Agency said.

The 11 members bound by quotas kept output at 26.8 million barrels a day last month, implying compliance of 53 percent, the Paris-based IEA said today in its monthly report. Supplies from all 12 nations, including Iraq, fell 0.2 percent to average 29.15 million barrels daily.

The Organization of Petroleum Exporting Countries, responsible for about 40 percent of world crude oil supply, announced a record limit on production in December 2008 as global demand collapsed. The group’s adherence to the cut of 4.2 million barrels a day, capping output at 24.845 million, slipped as prices rebounded 78 percent last year.

The compliance percentages are calculated based on the 11 nations targeting a 4.2 million barrel-a-day reduction from a base production rate of 29.045 million barrels a day in September 2008.

Angolan supplies rose by 50,000 barrels a day to 1.79 million barrels after Total SA resumed operations from its Girassol field, according to the IEA. Angola and Nigeria were the least compliant with their individual quotas, failing to implement any of the agreed supply cuts.

Sabotage

Nigerian output declined by 20,000 barrels a day to 2.14 million last month “due to sabotage,” the agency said. Royal Dutch Shell Plc declared force majeure on Bonny Light oil exports in August and September because of theft, the company said on Aug. 18.

Saudi Arabia, OPEC’s largest producer and the member conforming best with output cuts, kept production at 8.28 million barrels a day, unchanged from July, the IEA said.

OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system. Force majeure is a legal clause that allows producers to miss export obligations because of circumstances beyond their control.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net