Kyari foresees oil demand increase in Africa
According to Mallam Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), any report that global crude oil demand will collapse soon is unrealistic, especially with increasing economic growth in Africa and the reopening of the Chinese economy.
A report by S&P Global Commodity Insights indicates that Kyari, who also serves on Nigeria’s OPEC delegation, said during a webinar that China’s eventual reopening and slow crude supply growth means the global oil market will be in short supply.
In anticipation of slowing demand and the possibility of recessions in key economies, OPEC and its allies, including Russia, decided to reduce production quotas by two million barrels per day (bpd) from November to the end of 2023.
The decision came despite the European Union’s plan to impose an embargo on Russian crude imports beginning in December and refined products beginning in February.
Kyari said, “I do not see how this demand will collapse because countries are coming back. China is recovering from COVID-19 and a number of countries, particularly sub-Saharan African countries, are growing.
“These economies are growing very, very fast against all odds. That means more consumption.”
At its December meeting, the OPEC+ alliance reaffirmed the decision, and a nine-country monitoring committee, on which Nigeria sits, will convene on February 1 to review market conditions and, if necessary, recommend changes to production volumes.
Since the quotas were reduced, Platts-assessed Dated Brent has fallen from more than $100 per barrel in early November to less than $80 in recent days.
He said there was little evidence that the oil market was facing a shortage from the measures.
He noted, “While sanctions have impacted how much crude Russia has been able to export, Middle Eastern producers have not lost market share.”
Speaking on Nigeria’s oil outlook, he stated that the country intends to increase production in 2023, but that due to the refurbishment of two domestic refineries, not all of the extra crude output will be exported.
At the end of December, crude and condensate production was 1.519 million bpd, with a target of 1.8 million bpd by the end of 2023. “We know it is practical to go to 2.2 million,” Kyari added.
Source: Energy Ghana