OPEC Caps Nigeria’s Oil Output at 1.8mbpd

December 1, 2017
OPEC Caps Nigeria’s Oil Output at 1.8mbpd

By Dipo Olowookere

Nigeria has been told by the Organization of Petroleum Exporting Countries (OPEC) not to produce above 1.8 million barrels per day (1.8mbpd) of crude oil.

This decision was reached on Thursday at the meeting of OPEC and non-OPEC members held in Vienna, Austria.

Libya was also informed not to produce oil above one million barrel per day.

Nigeria presently produces about 1.75mbpd of crude oil, while Libya does 980,000mbpd.

This oil cap is aimed at stabilising the price of the commodity at the global market.

Both African nations were allowed to extend their oil-production cuts to the end of 2018, but would be subject to a review at the next scheduled meeting in June.

Nigeria, in its 2018 budget, had pegged the oil production at 2.3mbpd, but with this latest development, it might have to adjust this benchmark.

Minister of State for Petroleum, Mr Ibe Kachikwu, who led Nigeria’s delegation to the meeting, disclosed that efforts would not be put in producing condensate and others not captured along pure crude by OPEC calculations.

“We’ve been asked to be disciplined, the word cut has not been used. We’ve resisted the word cut. The word cap has been accepted by me a long time ago.

“Clearly, there is a continuing obligation to ensure that we do not just flood the market because of the exemptions we were given.

“There’s a lot more energy around bringing everybody to the ball park, Nigeria is willing to be in that ballpark and contribute.

“Our contribution is fairly limited because we are still lacking yet in that capacity to reach the marks anywhere soon.

“Our current production is 1.75, we are still below the 1.8 that was the benchmark which is comfortable but you’re going to see a lot more pressure as we go into next year.

“Sometime late next year, we will probably see the capacity of Nigeria to do close to 2.3, 2.5.

“Can we do it? Probably not if we all keep to discipline. We are now going to be looking at producers within our country and those giving us barrels at the least cost price because we are going to cut scientifically those who are unable to produce below a certain benchmark,” the Minister told Bloomberg Television.

Yesterday, the Senate postponed passage of the 2018-2020 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to next Tuesday to await outcome of the meeting.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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