NIGERIA’S ongoing economic woes got considerably worse last month as December crude oil production tumbled to low of 1.17m barrels a day as output was curtailed in line with Organisation of the Petroleum Exporting Countries (Opec) agreements.
Following the global economic slowdown brought about by the coronavirus pandemic, Opec agreed to reduce production among its 13 members in a bid to boost prices. Historically, Nigeria’s Opec quota has been 2.5m barrels a day and her annual budget is predicated on this figure but with output now down to unprecedented lows, an economic crisis is looming.
In its monthly January report, Opec stated that Nigerian crude oil production fell by 155,000 barrels in December to 1.17m barrels per day from 1.33m barrels in November. Opec added that a meaningful rise in oil prices would brighten Nigeria’s economic outlook this year, although is dependent on global demand picking up significantly.
Total output from Opec’s 13-member states averaged 25.36m barrels per day in December, up by 280,000m barrels from the previous month. Opec noted in the report that Nigeria’s economy entered a recession in the third quarter of 2020 with real gross domestic product contracting by 3.6% year-on-year after a sharp contraction of 6.1% in the second quarter of the year.
An Opec spokesman said: “Crude oil output increased mainly in Libya, Iraq and the United Arab Emirates, while production decreased primarily in Nigeria, Congo and Angola. Libya’s crude oil output in December rose to 1.22m barrels per day, according to secondary sources.”
Opec and its Russia-led allies, known as Opec+, have been curbing output to support prices since 2017. It had believed that global demand would improve toward the end of 2020, mainly due to successful coronavirus containment measures in major consuming countries in the region.