https://www.reuters.com/article/us-opec-oil-output/unfazed-by-opec-libya-and-nigeria-seek-to-boost-oil-output-idUSKBN1E61CJ
Less than two weeks after OPEC’s decision to extend oil production
cuts, Libya and Nigeria – the only two exempt members of the group – are
signaling their intent to raise output next year.
While
several ministers at the Nov. 30 meeting of the Organization of the
Petroleum Exporting Countries suggested the two nations had joined the
output-curbing deal, both are working to add to their peak production
from this year.
On Friday, oil company Total said its new Egina
field offshore Nigeria was on track to start next year – adding 10
percent to the country’s production.
The
field will have a capacity of 200,000 barrels per day (bpd) and launch
in the fourth quarter of 2018, counterbalancing production constrained
by aging pipelines, perpetual theft and sabotage.
“That could
certainly change the dynamics,” said Ehsan Ul-Haq, head of crude and
products at Resource Economist, a consultancy.
The Nigerian
petroleum ministry did not respond to a request for comment on the Egina
field startup, and whether production elsewhere would be curtailed as a
result.
On
Saturday, the head of Libya’s U.N.-backed government met the head of
Libya’s National Oil Corp (NOC) and the governor of Tripoli’s central
bank to discuss how the corporation could get more cash to raise oil
output next year.
The NOC received a quarter of its requested budget in 2017, hampering efforts to sustain oil output near 1 million bpd.
Any
additional funds could help make crucial repairs to the country’s
energy infrastructure, a regular target for militant attacks, and boost
output above the roughly 1 million bpd mark where it currently stands.
Libya’s NOC has so far not spoken officially about the OPEC deal and declined a Reuters request for comment.
NO CAPS
The
developments may come as a surprise to market observers, who, after the
Nov. 30 meeting, believed Nigeria and Libya had agreed to participate
in the OPEC agreement by imposing official caps at their peak 2017
production levels.
Instead, the two countries merely provided
their production outlook for 2018 and an assessment that the combined
total would not exceed 2.8 million bpd, their forecast output for 2017,
two sources familiar with the matter told Reuters.
That outlook was dependent on both countries’ finances and security situation, one of those sources said.
The
headline of a statement issued by Nigeria’s petroleum ministry on the
day of the OPEC meeting stressed, in block capitals, that Nigeria and
Libya were exempt from cuts.
Oil Minister Emmanuel
Ibe Kachikwu emphasized in the statement that the nation’s condensates -
a form of ultra-light crude - were exempt from any total, giving it
leeway in calculations. He also told local media there was “no
obligation” to do anything.
Oil production from the two countries
has averaged 1.7 million bpd and 900,000 bpd, respectively, this year
according to Reuters assessments.
But it has swung in each country in a range of 340,000-350,000 bpd.
Editing by Dale Hudson
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