Flow Level Pressure

  • Should Nigeria Restrict Its Oil Supply?

Should Nigeria Restrict Its Oil Supply?

Mar 26 2018 Read 754 Times

Fronted by the biggest oil producers on the planet, OPEC has serious sway when it comes to dictating global crude supply and prices. However, while the cartel is pushing for an oil output embargo in a bid to bolster prices, Nigeria is championing a different approach.

The West African nation plans to boost output by 250,000 barrels per day, which would put it on track to hit its 2020 target of 2.5 million barrels per day. Shoreline Group, one of Nigeria’s biggest independent oil producers is a driving force, with plans to increase output by 50% by the end of 2018.

A conflict of interests

Already, national crude output is at the highest levels seen in over two years, with Nigeria producing almost 2 million barrels per day in January. As well as ramping up output, Nigeria is also kickstarting production on a new large-scale offshore oil field. When it hits full capacity, it will churn out 200,000 barrels per day.

Simultaneously, the Nigerian government has pledged to join a global pact designed to restrict oil supply. The embargo is being led by Saudi Arabia and Russia, and saw Nigeria agree to cap output at 1.8 million barrels a day in 2018. Basically, the Nigerian government is promising to curb production, while the country's independent oil producers are turning up the heat.

Experts maintain that if OPEC doesn't succeed in reigning in Nigerian oil production it could trigger a knock-on effect. The pact could dissolve, which would allow nations like Iraq and Angola to boost production capacity. There are also concerns that Russia could sidestep the pact, especially after a move that saw the country drastically increase output just before renewing their production curb deal with OPEC.

US net energy exporter status threatens Nigerian crude

Some critics maintain that failing to comply with OPEC's production cut could be a big mistake. Currently, the US is one of the biggest importers of Nigerian crude. Though according to the latest World Energy Outlook released by the United States Energy Information Administration, America could emerge as a net energy exporter by 2022. As a result, this would halt Nigerian imports and leave the country with a surplus of oil, plus a black mark from OPEC.

The oil industry is continually shaped by new trends. For a glimpse at the latest developments don't miss 'Current Application Trends in the Petroleum Industry Using EDXRF and Process XRT Gauge', which spotlights the latest Energy Dispersive X-ray Fluorescence technology.

Read comments0

Do you like or dislike what you have read? Why not post a comment to tell others / the manufacturer and our Editor what you think. To leave comments please complete the form below. Providing the content is approved, your comment will be on screen in less than 24 hours. Leaving comments on product information and articles can assist with future editorial and article content. Post questions, thoughts or simply whether you like the content.


Digital Edition

Petro Industry News September 2018

September 2018

In This Edition Fuel for Thought - New Partnership for the US Distributio - Element opens new oil and gas laboratory in Singapore - Metrohm Acquires B&W Tek Analytical Instrumentation...

View all digital editions

Events

SPE Annual Technical Conference & Exhibition

Sep 24 2018 Dallas, Tx, USA

Rio Oil & Gas 2018

Sep 24 2018 Rio De Janeiro, Brazil

Control-Tech

Sep 25 2018 Kielce, Poland

International Pipeline Expo

Sep 25 2018 Calgary, Alberta, Canada

MOGSEC 2016

Sep 25 2018 Kuala Lumpur, Malaysia

View all events