Businessday :: News you can trust

•Ateke Tom accepts amnesty offer

OPEC oil supply rose in September for a fifth consecutive month mainly due to higher output from West African members Nigeria and Angola, a Reuters survey showed on Thursday. 
Supply from the 11 members of the Organization of Petroleum Exporting Countries (OPEC) with output targets rose to 26.40 million barrels per day (bpd) from 26.20 million bpd in August, the survey of oil firms, OPEC officials and analysts found. 
The survey suggests OPEC has made 63 percent of promised supply cutbacks, down from 68 percent in August, and continues a trend of rising output indicating higher oil prices have prompted some in OPEC to relax adherence to output targets.
“Nigeria had an uncommonly good month in September but I don’t know if they can sustain it,” said Mike Wittner, oil analyst at Societe Generale in London. “The bottom line is if OPEC can minimise the output creep and hold crude supply about flat, recovering oil demand is going to do the job of reducing stocks for them going forward.” 
Nigeria’s contribution to OPEC’s growing output is down to the amnesty deal between the government and militants that had hitherto sabotaged production.
Yesterday, a top militant commander agreed to halt fighting in the oil-producing Niger Delta and take an unconditional pardon from President Umaru Yar’Adua.
Ateke Tom, whose men have carried out frequent attacks on oil installations, was one of three factional leaders with links to the main militant group MEND who had yet to accept the amnesty offer.
“I hereby formally accept the amnesty offer and lay down my arms,” Tom told Yar’Adua at a media briefing in Nigeria’s capital Abuja.
OPEC, source of more than a third of the world’s oil, has agreed to cut supply by 4.2 million bpd since September 2008 due to falling demand and prices. It has kept official output targets unchanged at meetings since, most recently on September 9. Supply was 1.56 million bpd higher in September than the implied target for the OPEC 11 of 24.84 million bpd, the survey found, meaning the group lowered output by 2.64 million bpd of the promised curbs. That gives the 63 percent compliance rate. Adherence peaked at 81 percent in April and March, according to Reuters estimates, but remained higher than their historical average compliance level of 60 percent. Oil prices traded lower on Thursday. U.S. crude was down 51 cents at $70.10 a barrel as of 1108 GMT. It reached a 2009 high of $75.00 in August.
The rise in output in September was led by Nigeria and Angola, which are often among the least compliant with OPEC production levels, according to industry surveys. Nigerian supply, which has been suffering from disruptions caused by militant attacks, increased as shipments climbed from several crude streams, including Forcados and Escravos. Output averaged 1.94 million bpd, up from 1.75 million bpd in August, the survey found. 
Still, shipments in October are set to slip, according to loading programmes. Angolan output, on a rising trend, also climbed in September. Shipments are expected to increase further in October to a 2009 high of 1.93 million bpd. 
Saudi Arabia, OPEC’s top producer, kept supply largely unchanged in September. Output from other Gulf OPEC members remained steady as they continued to shoulder the bulk of the group’s output curbs. Venezuelan output eased lower, reflecting the impact of maintenance work at a crude upgrading plant. Iran, the second-largest OPEC producer, kept supplies steady, but pumped 430,000 bpd above its OPEC target, the most in absolute terms of any member. Iraq’s production eased because of lower exports. Including Iraq, all 12 OPEC members pumped 28.85 million bpd last month, up 150,000 bpd from August, the survey found.