Nigeria will fully comply with the agreement by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC countries last July on crude oil production cuts, Nigeria’s Representative in the group, Mele Kyari, has said.
Mr Kyari who represents Nigeria on the OPEC Economic Commission Board is also the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC).
In a statement on Wednesday in Abuja, Mr Kyari reaffirmed Nigeria’s unwavering commitment to production adjustments agreed by OPEC and N-OPEC members under the Declaration of Cooperation (DoC) pact.
The agreement reached in December 2016 resolved to cut a total crude oil output of about 1.2million barrels per day.
It was shared in the ratio of 800,000 barrels per day for OPEC, and 400,000 barrels per day for non-OPEC led by Russia. The cut was to take effect from January 1, 2017.
The resolution was to help prevent a supply glut and stabilise the market and strengthen crude oil price at the international oil market.
Nigeria, Iran, Libya and Venezuela were exempted from the cut due to their peculiar economic conditions at the time the resolution was made.
The cut remained in place for an initial six months period until June 2019 subject to further reviews as necessary. Since the resolution took effect, it has been extended at least twice.
The decision helped Nigeria recover its lost production capacity from about 1.76million barrels per day to about 1.95 million barrels and ultimately to about 2.2 million barrels per day as crude oil price stabilised at the international crude oil market.
On July 2 this year, during the Ministerial meeting of the group in Vienna, Austria approved a nine-month-long extension of the decision for a global voluntary production adjustment called OPEC Plus directly affecting the United States, China, and Canada.
According to the OPEC Representative, Nigeria is totally committed to full compliance with the agreement reached by the parties to the DoC pact.
“Right now we are not only committed to the agreement but we have elevated our attitude towards it to the point of complete devotion to the adjustments and we urge other parties to follow suit,” the OPEC Rep stated.
Mr Kyari said he was optimistic “the momentary and artificially induced bearish trends would naturally correct itself based on the strong market fundamentals which have remained steadfast despite the price slid.”
With a visible steady decline in commercial stock overhang propelled by healthy demand, he said it is only logical for all advocates of oil price stability, like the OPEC Plus allies, to comply strictly with the agreed production adjustments.
“With the increasing volatility of the oil market, it has become commonsensical for Nigeria and all other parties to the agreement to entrench an attitude of unwavering devotion to the deal anchored on full and timely conformity to their obligations,” Mr Kyari said.
Crude oil price at the international market, which dipped to about $57.82 per barrel by August 7, from $59.71 per barrel the previous day, picked up by about 2.85 percent to about $59.47 on Tuesday, August 13.
Nigeria may be heaving a sigh of relieve with the development, as the crude oil price appears to be trending above the oil benchmark price of $60 per barrel approved in the 2019 budget.