03 December 2017, Sweetcrude, Lagos — Nigeria’s Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has explained how Nigeria can maximise its current exemption from the oil output cuts of the Organisation of the Petroleum Exporting Countries, OPEC, aimed at shoring up and stabilising prices.
In a statement released by the Ministry of Petroleum Resources over the weekend, Dr. Kachikwu said there is the need for the country to reduce production cost per barrel for Nigeria to benefit from the exemption.
“…for Nigeria to benefit maximally from the current production exemption and to encourage and improve upstream investment, the need for the country to reduce its production cost per barrel is imperative.”
The 173rd meeting of OPEC held in Vienna, Austria, agreed to extend its current production cuts agreement entered with participating Non-OPEC oil producers for another 9 months, and the Declaration of Cooperation amended to take effect for the whole year of 2018 from January to December 2018.
The meeting also took note of Nigeria and Libya’s incremental production and noted their special circumstances while agreeing to maintain their exemption from the production quota.
Nigeria and Libya committed to join the production reduction agreement once they are able to produce collectively a volume of 2.8 million barrels per day with Nigeria put at 1.8 million barrels per day and Libya, 1 million barrels per day.
The minister said he will continue to push upstream operating companies in Nigeria to reduce production cost per barrel to ensure full advantage of the benefit and value for Nigeria.
Kachikwu also welcomed the outcome of the meeting and pledged Nigeria’s commitment to meeting its obligation towards producing 1.8 million barrels per day less condensate output which is not factored into the OPEC quota calculation.