Nigeria and OPEC
Cooperating on oil production
As 2009 drew to a close, the Organization of Petroleum Exporting Countries (OPEC) prepared for a sharp escalation in output as Nigeria pressed ahead with repairing its damaged oil infrastructure. In a special report, the International Energy Agency (IEA) acknowledged the welcome success of the country’s amnesty programme aimed at militant groups responsible for carrying out attacks at oil installations and pipelines in the Niger Delta region.
From 1.75 million barrels per day (bpd) in July 2009, Nigeria’s crude oil production was up to 2.08 million barrels per day of crude oil by May 2010, the highest level since December 2007. Paradoxically, the increase comes at a time when energy forecasters are predicting slowing growth in global oil demand in the years ahead, while some of OPEC’s 12 member nations, notably Nigeria, are ramping up their capacity to pump oil. Collectively, OPEC members supply 40% of the world's oil.
Nigeria, a high-profile OPEC producer that has been troubled by security problems in recent years and has suffered involuntarily sharp cuts in its oil output as a result, is now seeing a welcome upturn in its fortunes. It is on the path to getting its petroleum sector back on track with new projects and the restoration of long-time disabled production facilities.
Recent years have seen OPEC walking a tightrope while juggling production to optimise income for its members. It has meant maintaining a tight rein on supply alongside cautious investment in the oil sector, upon which its members rely for a good proportion of their GDP. However, demand for oil has fallen steeply as global recession has taken hold over the last two years. Crude prices fell from a high of USD140 in the summer of 2008 to around USD40 a barrel in early 2009; in May 2010, oil prices reached a 19-month high of USD84.15 a barrel, but slid to a ten-month low of USD68 by the end of the month.