Analysis: Nigeria and Angola account for half of the OPEC+ oil supply gap
Almost half of the planned oil supply shortfalls by OPEC and its allies are due to Nigeria and Angola, new data showed, reflecting several factors, including moves by Western oil majors to move away from African projects.
Statistics showed that OPEC and its allies pumped 1.45 million barrels per day - equivalent to 1.5% of global supply - below the target level in March.
According to the new figures, Angola was responsible for about 300,000 barrels per day of supply shortfalls in OPEC+ while Nigeria was pumping nearly 400,000 barrels per day below the target level. The war in Ukraine also affected Russia's oil trade, and its production was about 300,000 barrels per day below its March supply target.
The OPEC+ shortage is why global oil prices rose to a 14-year high in March, above $139 a barrel, and have prompted calls from the United States and other consumers for producers to pump more.
However (OPEC) has repeatedly rejected calls - and one contributing factor is that some of its members do not have oil available to pump.
In OPEC's view, investment cutbacks after the oil price crash in 2015-2016 due to oversupply, combined with an increased focus by investors on economic, social, and governance (ESG) issues, have resulted in spending shortfalls needed to meet demand.
Gulf producers boost investment
Gulf OPEC producers led by Saudi Arabia essentially meet OPEC+ targets, and OPEC sources say their relative lack of reliance on outside investors has helped.
"The lack of investment has affected more countries in which dependence on foreign investment is more prominent," said an OPEC+ source from a Gulf producer.
"Saudi Arabia, the UAE, and Kuwait are increasing investment, and that can help offset declines elsewhere," said Audun Martinsen, an analyst at Rystad Energy.
It also highlights why OPEC is not getting involved more because it is tough for OPEC to increase production overnight, Martinsen said.
Angolan state oil company Sonangol and Nigerian state oil company NNPC did not immediately respond to Reuter's requests for comment on their production decline or its reasons.
According to a 2021 report by the Arab Petroleum Investments Corporation or APICORP, producers in the Middle East area and North Africa were expected to increase energy investment to $805 billion in 2021-2025 - an increase of $13 billion over the previous year's five-year forecast, although of influence epidemic.
In February, Saudi Arabia-based APICORP said it expected to increase oil and gas prices to support energy investment in the region.
Post a Comment