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The Nigerian government has joined other Orgsnisation of Petroleum Exporting Countries (OPEC+) counterparts in a historic curtailment of crude oil production to rebalance and stabilize the global oil markets, Minister of State for Petroleum Resources, Timipre Sylva, said on Friday.
As a result of this development, Nigeria joined OPEC+ to cut supply by up to 10 million barrels per day between May and June 2020, eight million barrels per day between July and December 2020 and six million barrels per day from January 2021 to April 2022, respectively.
Sylva who confirmed this development in a statement on Friday clarified that the supply cut is in tune with the country’s commitment to participating in the pursuit of its commitment to the framework of the declaration of cooperation entered on December 10, 2016 and further endorsed in subsequent meetings as well as the Charter of Cooperation signed in July 2019.
Nigeria, it would be recalled, adjusted budget estimate that is currently rebased at $30 per barrel and crude oil production of 1.7 million barrels per day, but the minister expressed optimism that possible price rebound could see Nigeria funding its budget optimally.
“Based on reference production of Nigeria of October 2018 of 1.829 million barrels per day of dry crude oil, Nigeria will now be producing 1.412 million barrels per day, 1.495 million barrels per day and 1.579 million barrels per day respectively for the corresponding periods in the agreement,” Sylva said.
This development, the minister said, is in addition to condensate production of between 360-460 KBOPD which are exempt from OPEC curtailment.
He clarified further that the agreement awaits close out of ongoing engagement with Mexico to agree on its full participation.
It is expected, the minister said, that this historic intervention, when concluded, will see crude oil prices rebound by, at least, $15 per barrel in the short term.
This development, he said, would inadvertently enhance the prospect of exceeding Nigeria’s adjusted budget estimate that is currently rebased at $30 per barrel and crude oil production of 1.7 million barrels per day.
The price rebound, he expressed further optimism, could translate to additional revenues of not less than $2.8 billion Dollars for the federation.
As a result of this development, Sylva sais,”it is, therefore, pleasing to note that despite the production curtailments that this historic agreement will entail, all planned industry development projects will progress as they will be delivered after the termination of the 9th OPEC/Non-OPEC Ministerial Meeting Agreement on adjustments in April 2020.”
HARRISON EDEH, ABUJA
