Nigeria received pleasant news Friday when the joint Organisation of Petroleum Exporting Countries (OPEC) and the non-OPEC Ministerial Monitoring Committee (JMMC) took a decision to extend the exemption granted the country over the output cut imposed on member countries in January 2017.
At its meeting which held in Vienna, Austria, the Committee approved Nigeria’s exemption extension, stating that it should be sustained until the country’s oil production stabilises.
Recall that the exemption was extended by another six months last May.
With this exemption, Nigeria is expected to receive more earnings from its oil exports as it would be able to export all the oil it produces even as oil prices have now risen to around $57 per barrel.
The Minister of State for Petroleum Resources, Ibe Kachikwu, had said recently that the country’s daily production capacity had expanded to an average of 1.8 million barrels per day since the sustained exemption.
At the meeting in Vienna, Kachikwu, who led the Nigerian delegation, argued that although Nigeria was making considerable progress since October 2016 in its production recovery efforts, it was not yet at full stability levels.
“Although Nigeria’s oil production hit 1.802 million barrels per day in the month of August, that was not enough justification for a call by some countries for Nigeria to be brought back into the fold”, the oil minister stated.
Kachikwu assured that Nigeria would be bound by any agreements and resolutions collectively made by OPEC, including the need to cap its oil production when it has stabilised at 1.8 million bpd.
He added that although Nigeria was not a member of the five-nation JMMC, the country was fully in support of it, and had confidence in its market stabilization efforts.
It would be recalled that the JMMC was set up following OPEC’s 171st Ministerial Conference on November 30, 2016 to accelerate the stabilisation of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.
The initial production cut agreement, which came into effect January 1, 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial meeting on May 25, 2017 decided to extend the voluntary production adjustments for another nine months effective July 1, 2017.
At this its 5th meeting, the JMMC welcomed the participation of Iraq, Libya and Nigeria, and the reaffirmation of their commitment to ensure the success of the Declaration of Cooperation.
The President of the OPEC Conference, Khalid Al-Falih, who is also the Saudi Arabian Minister of Energy, Industry and Mineral Resources, also expressed his support for the JMMC, while reiterating his country’s commitment to the success of the agreement.
Acknowledging the gains so far made, Al-Falih cautioned against complacency, and emphasized the need for under-performing participating countries to raise their levels of compliance to 100 per cent in order to further boost cooperation towards the rebalancing of the market.
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