By Sebastine Obasi
There are indications that Nigeria’s oil production has reduced as the country’s rig count, dipped by one in the month of March, having recorded six as against seven recorded in February, data from the Organisation of Petroleum Exporting Countries, OPEC, Monthly Oil Market report, MOMR, showed.
OPEC’s rig count, on the other hand, increased by one, as its March result showed 355 as against 354 posted in February. However, world rig count suffered reduction by 42, having posted 1,339 in March as against 1,381, posted in February. Among the 13 – member OPEC, Algeria led the gainers’ pack with its plus three rig count, having posted 25, as against 23 recorded within the period under review. Iraq also had plus three, as posted 34 against 31 posted within the period under review.
Saudi Arabia, with its minus three, led the losers’ pack, as its rig count showed 60, as against 63 posted within the period review. Kuwait has minus one, as it recorded 27, against 28 posted within the period under review. Eight OPEC members had their rig count unchanged. Angola, Congo, Equatorial Guinea, Gabon, Iran, Libya, United Arab Emirates and Venezuela recorded 4, 0, 0, 1, 117, 12, 44 and 25, respectively.
As regards non OPEC members, the United States has plus 11, as it recorded 408 in March, as against 397 recorded the previous month Canada had a huge loss of 63, as recorded 108 in March, against 171 recorded the previous month. Mexico had minus 2, as its rig count for March showed 44, as against 46 recorded in February. Similarly, Norway had its rig count dip by four, as it posted 14, as against 18 posted within the period under review. The United Kingdom had its rig count unchanged as it remained at nine. The Organisation for Economic Co-operation and Development, OECD Americas had a huge loss of 55, having recorded 561 in March, as against 616 recorded in February. OECD Europe had minus one, as its rig count showed 55 in March, as against 56 recorded in February. OECD Asia Pacific had minus two, having recorded 18, as against 18 recorded within the period under review.
World Oil Supply
According to the MOMR report, Non-OPEC liquids supply for 2020 is revised up by 42 thousand barrels per day, tb/d and estimated to have declined by 2.52 million barrels daily, mb/d year-on-year, y-o-y to average 62.89 mb/d. US crude and condensate output declined by 0.94 mb/d y-o-y to average 11.3 mb/d, while liquids production dropped by 0.8 mb/d y-o-y to average 17.62 mb/d.
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Oil supply also declined in Russia by 1.0 mb/d, to average 10.59 mb/d. Moreover, production declined in Canada, Colombia, Kazakhstan, Malaysia, the UK and Azerbaijan, while oil supply is estimated to have increased in Norway, Brazil, China and Guyana. Non-OPEC liquids supply for 2021 is also revised up by 24 tb/d to average 63.83 mb/d, but in terms of growth, it was revised down by a slight 18 tb/d and is now forecast to grow by 0.93 mb/d y-o-y.
The pandemic-driven crash in oil prices in 2020 caused investors to shy away from the shale industry, forcing companies to look at asset sales and mergers for survival. However, while most drillers continue to focus on paying off debt and returning capital to shareholders instead of pursuing growth, higher prices could translate into higher production levels. The drilling and completion trend indicates upcoming robust monthly growth.
Active drilling rigs in the US climbed by 13 rigs, reaching 430 rigs for the 17th increase in the past 19 weeks. The US liquids supply growth forecast remained unchanged at 0.16 mb/d, however, tight crude output is forecast to decline y-o-y by 0.1 mb/d, while uncertainties persist. Activity and spending in US oil fields is rising this year as the industry recovers from last year’s pandemic-driven price crash, according to energy company executives polled by the Federal Reserve Bank of Dallas in a recent survey.
Nevertheless, following a drop of $144 billion y-o-y in capital expenditure in oil and gas upstream (Exploration and Production) sectors in non-OPEC countries, upstream capital spending in 2021 is expected to remain well below 2019 levels. The main drivers for supply growth for 2021 are expected to be Canada, the US, Norway and Brazil. OPEC non gas liquids, NGLs and non-conventional liquids production in 2020 is estimated to have declined by 0.13 mb/d y-o-y at 5.13 mb/d. For 2021, OPEC NGLs are forecast to grow by 0.08 mb/d y-o-y to average 5.21 mb/d. OPEC crude oil production in March was up by 0.20 mb/d m-o-m to average 25.04 mb/d, according to secondary sources. Preliminary non-OPEC liquids output in March, including OPEC NGLs, is estimated to have increased by 0.93 mb/d m-o-m, mainly in the US, due to production recovery after heavy declines in February. As a result, preliminary data indicates that global oil supply increased in March by 1.22 mb/d m-o-m to average 93.23 mb/d, down by 7.22 mb/d y-o-y.
Vanguard News Nigeria
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