OPEC Grants Nigeria’s Oil Output Cut Exemption Request

crude oil prices

By Dipo Olowookere

The request by the Nigerian government for an exemption from the crude oil production cut has been granted by the Organisation of Petroleum Exporting Countries (OPEC).

At the meeting of the Joint Ministerial Monitoring Committee of OPEC and Non OPEC Countries in Vienna on Friday, OPEC said Nigeria would be given more time to stabilise its output before considering capping its production.

Years of instability in the oil-rich Niger Delta region of the country resulted into a drop Nigeria’s oil production, causing its foreign reserves to deplete and dragging the country into recession last year.

However, recent stability in the region has led to a steady rise in the nation’s oil production and its exit from recession in the second quarter of 2017.

At the OPEC meeting in Vienna, Minister of State for Petroleum Resources, Mr Ibe Kachikwu, who led Nigeria’s delegation to the meeting, had argued that although Nigeria’s production recovery efforts have made some appreciable progress since October last year, Nigeria was not yet out of the woods.

He noted that even though Nigeria hit 1.8 million barrels per day in the month of August, it was not enough justification for a call by some countries for Nigeria to be brought into the oil production cut deal.

Mr Kachikwu emphasized that Nigeria, as one of the older members of OPEC, will continue to work for the good of the organization and its member countries, respecting whatever agreements and resolutions are collectively made.

He stated that Nigeria will be prepared to cap its crude production when it has stabilized at 1.8 million barrels per day.

The Minister said that although Nigeria is not a member of the 5-nation Joint Ministerial Monitoring Committee, he had gladly accepted the invitation of the co-chairs of the committee and the OPEC Conference President to attend the meeting because he believed that the committee was doing a good job and needed to be support and also to clarify Nigeria’s position on its crude oil production.

The meeting noted that overall compliance by OPEC and Non OPEC participating countries to the agreement on crude oil production cut for the month of August was 116 percent, the highest since the agreement came into effect on January 2017.

It further noted that the objectives of the accord were steadily being achieved with the gradual draw-down of inventories by nearly 50 per cent since the agreement came into effect.

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 dipo.olowookere@businesspost.ng

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