The outlook for Nigeria’s oil revenues improved significantly yesterday, as crude oil prices hit US$58 per barrel, the highest price for crude oil prices since 2015.
With the combination of the upward swing in crude prices, along with the exemption from the crude oil production cut by OPEC, Nigeria is now in good stead for faster economic recovery.
The country’s daily production has already hit an average of 1.8 million barrels and about 500,000 barrels of condensates, thereby bringing total oil production to 2.3 million barrels per day.
The meeting of the Joint Ministerial Monitoring Committee of OPEC and Non OPEC Countries, which ended in Vienna last weekend, endorsed Nigeria’s position that the exemption granted it at the November 2016 Ministerial Conference should be sustained until it stabilizes its crude oil production.
Industry watchers had expressed fears that because her crude oil production has recently hit an average of 1.8 million barrels and about 500,000 barrels of condensates per day, the meeting would ask Nigeria to put a cap on her production.
Emmanuel Ibe Kachikwu, Nigeria’s Minister of State for Petroleum Resources, who led the country’s delegation to the meeting, had argued that although Nigeria’s production recovery efforts have made some appreciable progress since October last year, Nigeria is not yet out of the woods.
Kachikwu noted that even though Nigeria hit 1.802 million barrels per day in the month of August, that was not enough justification for a call by some countries for her to be brought into the fold.
Kachikwu emphasised that Nigeria, as one of the older members of OPEC, would continue to work for the good of the Organisation 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 stabilised at 1.8 million barrels per day.
Minister Kachikwu said that although Nigeria is not a member of the five-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 supported, 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 per cent, 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.
The higher price is also a boost to the country’s external reserve, which now stands at about $33 billion.
Nigeria’s 2017 budget is based on a crude price of US$44.5
The country’s recent exit from the recession has been a as a result of the steady rise in the price of crude and cessation of hostilities from the Niger Delta militants who have stopped breaking pipelines and allowed crude production to grow steadily.
Olusola Bello
