Pressure on Nigeria To Cut Oil Production As OPEC Meets

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The pressure on Nigeria to reduce its crude oil production figure of 1.8 million per day is expected to increase as the Organisation of Petroleum Exporting Countries (OPEC) meets on Friday, September 22, 2017 in Vienna, Austria.

While most oil producers including, non-OPEC members, believe that the relative peace in the Niger Delta has boosted the national production well beyond the 1.8 million mark, coupled with data from OPEC secondary sources that Nigeria has exceeded the figure. Nigeria has also countered by explaining that its production is still well below the 1.8 million figures.

The Guardian reported that the office of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has visited the secondary sources of OPEC to explain that production figures ascribed to Nigeria was wrong.

Indeed, a four-man team met the OPEC secondary sources that included S&P Global Platt, Argus Media, International Energy Agency, U.S. Energy Information Administration, Oil and Gas Consulting Company and Petroleum Intelligence Weekly, where it argued that most of the figures submitted to OPEC included condensate.

Additionally, the team argued that both Agbami and Oso exclusively produced condensate products, which were classified as part of crude oil production of Nigeria.

It was gathered at the weekend that Kachikwu has now been invited to attend the OPEC and non-OPEC countries Joint Ministerial Committee meeting in Vienna to explain the prospect of Nigeria oil production for the foreseeable future.

A source at the OPEC headquarters in Vienna said: “Every month, the Joint Technical Committee sits to compare notes on the level of compliance by the participating countries and then submit a report to the Joint Ministerial Committee that comprises Saudi Arabia, Kuwait, Venezuela, Oman and Russia. While the technical meets every month, the Ministerial committee meets once in two months.

Nigeria would be asked how she sees her production rising in the next two, three to nine months. When Nigeria supplies these figures, the Ministerial committee will then be in a position to determine when the production cut will be applicable to Nigeria.”

According to figures from OPEC, Nigeria presently produces about 1.7 million barrels of crude oil per day and about 300,000 million barrels of condensate component as at the end of August, which puts no immediate pressure on Nigeria going into the monitoring committee meeting.

The source also said if Nigeria fails to attend the meeting, it would send a wrong signal that she is not ready to abide by the oil production ceiling championed by Nigerian-born OPEC Secretary General, Mohammed Barkindo.

Meanwhile, the price of petroleum has continued to move downwards from N145 to N143 in the last four weeks.
In Abuja, most of the filling stations now sell petrol below the N145 mark even as the Nigerian National Petroleum Corporation (NNPC), continues to shoulder the importation of petroleum products into the country.

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