The crude oil production cut deal agreed by members of the Organization of Petroleum Exporting Countries (OPEC) and its allies late last year has been implemented by Nigeria, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said.
The production cut deal is expected to enhance the impact of supply cuts that have already boosted crude prices.
“We’re basically complying, effective February” with the country’s pledged 53,000 barrel-per-day reduction, Bloomberg quoted Kachikwu as saying in an interview on Thursday.
“The price fluctuations mean OPEC needs to be a bit more together, a bit more determined to try to defend the market,” he added.
It will be recalled that OPEC and its allies had agreed to reduce output by 1.2 million bpd in the first half of 2019 in order to prevent a supply glut.
Though the deal has been able to contribute to a jump in crude prices of more than 20 per cent so far this year, implementation has been uneven, with Saudi Arabia cutting deeper and faster than promised and other nations including Russia going slow.
Nigeria actually boosted crude production by 52,000 bpd to 1.792 million in January, according to third-party estimates compiled by OPEC’s secretariat.
In February, the country was compliant with its agreed 1.685 million bpd limit, Kachikwu said.
Members of the group will meet again in April to discuss whether to continue the supply reductions in the second half of the year, though Nigeria has said it will be hard for it to make deeper cuts.
“If more cuts need to come, there will be major challenges because between December and now, we’ve had the Egina field come online”, Kachikwu said.
The offshore field, operated by French energy giant Total, had not yet reached its maximum production level of about 200,000 bpd, but might do so in March.
Some of that output is light oil called condensate, which isn’t counted in the OPEC+ deal, and some is crude, according to him.
“The more we go outside the parameters of what we’ve agreed upon, the more we willl struggle. We need all the money we can get for the country,” Kachikwu said.
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