Kachikwu explained that Nigeria and Libya, which had enjoyed exemption from the cap were technically allowed to maintain their status quo. However, with pledges, they would watch the volumes of oil they will bring to the market in 2018 so as not to disrupt the market rebalancing efforts.
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“Together with the Russian Federation and other countries I can assure you that we are in the process of writing a completely new chapter in the history of oil,” Barkindo said.
The price increase is an additional benefit to Nigeria, which just secured the nod of OPEC for the extension of its exemption from crude oil production cap following the country’s plea to be exempted until it stabilises its production.
“Oil is relatively underpriced compared with other markets, but any steep rise would be offset by rising shale oil production,” said Tomomichi Akuta.
He 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 Nigeria to be brought into the fold.
Nigeria’s crude oil production has consistently increased from the 1.511 million bpd in first quarter of this year; 1.616 million bpd in second quarter to 1.710 mpbd in June and 1.723mbpd in July.
“The market is still topsy-turvy; today I think we are around 1.6 million barrels per day (bpd). A lot of days we are slightly above 1.8 million barrels because of the understanding with our Niger Delta brothers.”
“Over the years, Nigerian companies have found it difficult competing with their counterparts from jurisdictions where funding is accessible for 5% or less as compared to our market where bank lending rates hover around 20%,” he said.
“But if NNPC cannot do its job because of criminality, it portends danger that the economy would grind to a halt. Further activities of the corporation in the Basin will be based on sufficient security in the area,” he said.
Analysts have said the rise in exports from the US would add to global oversupply, and intensify the tussle for market share between the US, OPEC and Russia. It could weigh on crude oil prices.