05 October 2016, Sweetcrude, Lagos – The Organisation of the Petroleum Exporting Countries, OPEC, would be facing a hard task ahead of its November meeting in Vienna, Austria.
It would have to contend with difficult negotiations in the allocation of its new production target amid rising output amongst members, which, according to Reuters survey, was expected to reach the highest level in recent history in September.
Meeting last week in Algiers, the Algerian capital, in an emergency meeting to discuss possible production freeze, OPEC agreed to limit supply to support prices, its first such decision since 2008.
Specifically, the organisation committed itself to reducing output to between 32.5 million barrels per day, mbd, and 33mbd.
The implication of this is that its members, including Nigeria, would see a reduction in their respective production quotas to accommodate the reduction. Dr. Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, said OPEC would set up a committee to work out how the reduction in production would be split among members. The committee will report back to the group in November, which is when OPEC plans to hold its next formal ministerial meeting in Vienna.
But, industry experts expect the organisation to face a hard time in trying to set new production quotas for members in view of the difficulty it faced in getting a consensus among members on the new production cut.
“The agreement still leaves hard and difficult negotiations for the individual caps to be set