July 14 (UPI) — Disruption to Nigerian oil exports is offset by production gains from Libya, which is on pace to add another 100,000 barrels per day to the market, a market report found.
Nigeria and Libya are two members of the Organization of Petroleum Exporting Countries exempt from a multilateral effort to balance the market with production declines so they can steer oil revenue to national security efforts. Since the deal was implemented in January, both countries have stabilized somewhat and in part undermined the broader OPEC-led effort.
OPEC economists in their monthly market report for July said that, combined, Nigeria and Libya were adding about a quarter million barrels of oil per day to the market, while other member states scale back.
“A rebound in Libyan and Nigerian production added pressure to an already amply supplied Atlantic Basin due to a massive increase in U.S. shale oil production,” OPEC economists said in their latest report.
The Shell subsidiary in Nigeria, however, declared force majeure, a contractual condition related to circumstances beyond the control of the parties involved, over exports. That signals a disruption in the output from Nigeria.
“Meanwhile, figures showing production at Libya’s recently-opened Abu Attifel oil field has reached 85,000 barrels per day and could soon rise to 100,000 barrels per day is having a muted impact on sentiment,” a market report emailed from London oil broker PVM read.
Libya’s return has been the most high-profile of the two. This week, members of Libya’s national oil company met with officials from Norwegian energy company Statoil to review developments in the North African country. According to the Libyan National Oil Corp., officials from Statoil were told of the “improvement of security situation in the production areas and NOC plans to return production to its normal levels.”
Nigerian crude oil production rebounded by about 6 percent between May and June. Libyan crude oil production gained 17.5 percent.
Production before the outbreak of civil war ended the regime of Moammar Gadhafi 2011 was around 1 million barrels per day. OPEC reported June production at 852,000 barrels per day.