IMG.gif

Opec-Plus: Weak Members Keep Production Growth In Check

Copyright © 2021 Energy Intelligence Group
Austria OPEC Meeting

Production by the 23 countries that are part of the Opec-plus alliance is forecast to slightly exceed 42 million barrels per day in August, a gain of nearly 560,000 b/d compared to July. That compares to a monthly growth of 800,000 b/d seen for demand, which is now in overdrive as motorists in the Northern Hemisphere hit the roads in the last weeks of summer (related). Output by the 13 members of Opec is expected to reach 27 million b/d in August, an increase of some 660,000 b/d on July, while the allied 10 non-Opec nations will produce 15 million b/d., a 100,000 b/d fall from July due mainly to maintenance works at Kazakhstan’s massive Tengiz oil field operated by Chevron. By the fourth quarter, Opec-plus is forecast to crank out 43.18 million b/d, which contrasts to 45.93 million b/d produced in the final quarter of 2019 -- right before the world learned about the Covid-19 pandemic. The Opec-plus alliance won’t return to that level of production until the last quarter of 2022, according to Energy Intelligence’s forecast (OMI Jun.16'21). In July, the alliance produced 41.5 million b/d, a 15-month high. Monthly growth, however, was slightly under 400,000 b/d despite higher output ceilings agreed back in April as output in four countries -- Nigeria, Angola, Iraq and Malaysia -- underwent a significant monthly decline due to technical challenges in kick-starting old fields and infrastructure. This boosted overall compliance for the alliance. Energy Intelligence reckons that aggregate production by these four countries was 825,000 b/d short of their collective target -- a total 25.5 million barrels. West Africa’s Nigeria was 378,000 b/d below its allowed production volume, Angola was 233,000 b/d under. As a result, July compliance among the 19 Opec-plus members with a quota amounted to 112%. Iran, Libya, Venezuela and Mexico are members without a set ceiling to their production level. July was the last month Saudi Arabia tapered its voluntary 1 million b/d cut it had announced in January, and Riyadh used the occasion to ramp up exports by some 850,000 b/d, according to shipping data. Compared to June, Saudi production increased by 548,000 b/d and came in at 9.448 million b/d, a 15-month high. The tally was still 47,000 b/d short of the targeted ceiling and translated into a 103% compliance rate for the month. In many ways July truly marked the Saudis’ return to the global oil market: monthly output was 951,000 b/d more than the average for the first half of the year, most of which was characterized by the unilateral reduction. Set against the sharp decline by producers such as Nigeria and Angola, Saudi output as a share in the 13-member Opec reached 36% last month, up from an average 33% in January-June (OMI Jul.19'21). Output by the nine non-Opec members with a quota was flat in July. Malaysia showed a 54,000 b/d decline in production, which is understood to stem from a natural decline of legacy fields. Russia, as usual, overproduced by just over 100,000 b/d, while Kazakhstan and Oman maintained their laggard status as well. Still, thanks to Malaysia’s underperformance and a decline in the BP-operated Azeri-Chirag-Guneshli field in Azerbaijan, whose own compliance reached a high of 110%, the July compliance rate for the non-Opec half of the alliance was assessed at 94%. OPEC WELLHEAD PRODUCTION 2021 Jul'21 vs Current Potential Adjusted ('000 b/d) Apr May Jun Jul Jun Jul '20 Capacity Spare Spare* Saudi Arabia 8,190 8,482 8,900 9,448 +548 +958 12,250 2,802 2,052 Iran‡ 2,500 2,550 2,500 2,520 +20 +570 2,520 0 0 Iraq 3,912 3,927 3,867 3,912 +45 +151 4,700 788 788 Kuwait 2,328 2,354 2,384 2,423 +39 +265 3,060 637 637 UAE 2,613 2,641 2,682 2,721 +39 +108 4,200 1,479 1,479 Venezuela 570 550 550 540 -10 +190 540 0 0 Nigeria‡ 1,438 1,224 1,349 1,201 -148 -148 1,800 599 599 Libya 1,125 1,170 1,200 1,108 -92 +974 1,108 0 0 Algeria 882 889 901 914 +13 +105 1,060 146 146 Angola 1,152 1,002 1,147 1,086 -61 -87 1,400 314 314 Congo (Br) 247 253 261 250 -11 -33 250 0 0 Equatorial Guinea 120 85 122 100 -22 -18 100 0 0 Gabon 260 241 177 172 -5 -98 172 0 0 Total Opec Crude 25,338 25,368 26,039 26,395 +356 +2,936 33,160 6,765 6,015 Opec NGLs 5,128 5,123 5,105 5,038 -67 -75 -- -- -- Opec Other Oil 100 100 100 100 0 +2 -- -- -- Total Opec 30,566 30,591 31,244 31,533 289 +2,863 -- -- -- ‡ Excludes condensates. Source: Energy Intelligence July 2021 Opec and Non-Opec Compliance Opec Base Target July Compliance Saudi Arabia 11,000 1,505 9,448 1,552 103% Iraq 4,653 637 3,912 741 116% UAE 3,168 433 2,721 447 103% Kuwait 2,809 384 2,423 386 101% Nigeria 1,829 250 1,201 628 251% Angola 1,528 209 1,086 442 211% Algeria 1,057 145 914 143 99% Congo (Br.) 325 44 250 75 170% Gabon 187 26 172 15 58% Eq. Guinea 127 17 100 27 159% Opec 10 26,683 3,650 22,227 4,456 122% Iran 3,296 0 2,520 0 NA Venezuela 1,171 0 540 0 NA Libya 1,114 0 1,108 0 NA Opec 13 32,264 26,395 4,456 122% Non-Opec Base Target July Compliance Russia 11,000 1,505 9,603 1,397 93% Mexico 1,753 0 1,677 0 NA Kazakhstan 1,709 234 1,533 176 75% Oman 883 121 817 66 55% Azerbaijan 718 98 610 108 110% Malaysia 595 81 404 191 236% Bahrain 205 28 177 28 100% South Sudan 130 18 138 -8 NA Brunei 102 14 65 37 264% Sudan 75 10 81 -6 NA Non-Opec 10 17,170 2,109 15,105 1,989 94% Combined 20 43,853 5,759 37,332 6,445 112% In '000 b/d. Opec and non-Opec compliance based on crude

Public pressure and high natural gas prices may not be enough to solve the methane waste problem plaguing the Permian Basin.
Fri, Sep 17, 2021
Most Read
Production of hydrocarbon liquids outside the Opec-plus alliance will peak in 2025, our medium-term outlook shows, the inevitable result of lower investments upstream.
Thu, Sep 16, 2021