West Africa No Help to Opec's Capacity Problem

As Opec-plus casts around for capacity additions to raise output, West Africa appears unlikely to provide much help — either in the near term or over the next few years. In the short term, Nigeria and Angola's governments are expected to spend more of their oil windfalls on pre-election patronage and subsidies on gasoline and diesel than on boosting production capacity. Even after the elections, the scope for meaningful capacity increases will be limited. Nigeria has plenty of accessible oil reserves and infrastructure, but governance has been chaotic, international oil companies (IOCs) and local firms have slowed investment, and thieves and saboteurs continue to ransack key pipeline systems. The country pumped 1.17 million barrels per day of crude in May to dip below Angola, which managed 1.23 million b/d, according to Energy Intelligence estimates. Nigeria has the highest compliance rate of all Opec members at 857%, while Angola’s is 457%. Angola’s leaders are trying to make the most of maturing deepwater fields but cannot turn back the geological clock. Mature producer Congo (Brazzaville) and minor producer Equatorial Guinea reported compliance of 576% and 506%, respectively, as sub-Saharan Africa struggles to pull its weight in Opec-plus.