OPEC reopens Oil taps as African giants struggle to pump more

OPEC reopens Oil taps as African giants lose race to pump pump more [Image:courtesy]
Africa—Angola, Nigeria, and Algeria are the top oil exporters in Africa with 86.9 million metric tons, 64.5 million metric tons, and 57. 6 million metric tons respectively.

The countries will struggle to boost output to their OPEC quota levels until at least next year as underinvestment and nagging maintenance problems continue to hobble output, sources at their respective oil firms warn.

Their battle mirrors that of several other members of the OPEC group who curbed production in the past year to support prices when Covid-19 hit demand, but are now failing to ramp up output to meet soaring global fuel needs as economies recover.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed in July to add 400, 000 barrels per day to production from August until December 2021, slowly phasing out the unprecedented supply cuts.

However, Nigeria and Angola have underproduced by an average of 276,000 bpd so far this year out of their combined average OPEC quota of 2.83 million bpd according to Refinitiv data.

They are likely to remain below quota through the end of the year, according to industry sources and Reuters calculations.

The oil not pumped is worth hundreds of millions of dollars.

Lockdowns aimed at stemming COVID-19 last year hindered the supply of spare parts and prevented maintenance work.

Companies battered by a 20-year low in crude prices also postponed major investments.

Kola Karim, chiefs executive of Nigerian producer Shoreline Natural Resources which has eight producing fields pumping around 50,000 bpd, said the backlog meant it would be one to two quarters before Nigeria could pump at its full capacity.

The maintained backlog covers everything from servicing wells to replacing valves, pumps, and pipeline sections.

Companies are also behind on plans to do supplementary drilling to keep production stable. These issues impacted virtually all companies in Nigeria, Karim said.

“So now things breaking…we’re now facing the music,” he spoke through added that the country would catch up on production by early 2022 as companies rush maintained repairs.