Angolan oil production overtook Nigeria’s in March, according to OPEC and the International Energy Agency (IEA). Nigeria’s output has been reduced recently by trouble on the Trans Forcados pipeline, which was bombed in early March. Angola, meanwhile, has benefited from mounting production from major projects.
OPEC’s secondary sources reported Nigeria oil production at 1.72 million barrels per day in March, down from 1.76 million bpd in February. It reported Angola had reached 1.78 million bpd in March, up from 1.76 million bpd in the previous month.
Direct reporting from the countries to OPEC told a similar story. Nigeria reported production of 1.68 million bpd for March, from 1.74 million bpd in February. Angola put its production at 1.78 million bpd from 1.77 million bpd.
The IEA reported Nigeria at 1.7 million bpd in March, from 1.76 million bpd the previous month. The Paris-based agency put Angola at 1.8 million bpd in March, compared with 1.76 million bpd in February.
The IEA went on to put the two West African producers as neck-and-neck in terms of average production in the first quarter of the year, at 1.77 million bpd each. Angola averaged 1.76 million bpd in the fourth quarter of 2015, while Nigeria was at 1.84 million bpd.
“Supply from Nigeria – at the lowest since July 2009 – is likely to be suppressed for a third month in April [owing] to ongoing force majeure on some 250,000 bpd of Forcados crude oil loadings,” the IEA’s Oil Market Report said. It went on to say that, at a price of US$40 per barrel, the Nigerian treasury could lose an estimated US$1 billion between February and May, when repairs were expected to be completed.
“Attacks on oil installations have risen since President Muhammadu Buhari vowed to stamp out corruption and oil theft,” it continued.
On April 18, reports emerged that Eni had declared force majeure on Brass River exports, as a result of a pipeline fire. May loading schedules were reported to be around 140,000 bpd for the terminal.
Nigeria has the edge in terms of productive capacity, even while exports are increasingly disrupted by trouble in the Niger Delta. The IEA put Nigeria’s sustainable production capacity at 1.9 million bpd and Angola at 1.81 million bpd.
Nigerian supplies to the US were reduced as a result of the outage, the IEA’s April report said, while Chinese deliveries of Angolan crude have accelerated. In particular, it said, West African sales to China will “breach 1 million bpd during April” driven by Angolan sales.
One factor to note that benefits Nigeria is reduced production of tight US oil. Nigeria was a major supplier of crude to the US before the shale oil boom took hold but as production from North Dakota and Texas increased, Nigerian supplies were squeezed out because of the similarities in crude types between US shale oil and Nigerian crude.
As US shale supplies slow, appetite for Nigerian crudes are likely to rise, benefiting from increased gasoline demand in North America. Exports to the US passed 500,000 bpd recently, the IEA said.