12 July 2017, Sweetcrude, Lagos — The Chairman cum Managing Director, Dansaki Petroleum, Engr. Adenrele Afolabi has said that Nigeria should not agree to cap its oil production and exports, saying it is too soon for the country to do so.
His reaction came following a report that Nigeria has been invited to OPEC’s meeting holding on July 24 in St. Petersburg, Russia, to discuss its output and how it can contribute to the cap deal.
Afolabi who was also twice Chairman Society of Petroleum Engineers (SPE), said it is unfair for the country to be asked to cap, calling on the Minister of State for Petroleum, Ibe Kachukwu to use his political and diplomatic reach to stop OPEC from including the country in the output cap regime.
“Nigeria joining the cut is way too soon. When did we resume production and export? Don’t forget that we were producing like 1 million barrels per day early in the year so, we only just resumed,” he said.
When asked whether or not Nigeria has recovered its lost quota, he answered with an affirmative “no”, adding that “the country has not even recovered from the loss of not producing and exporting for months”.
Sweetcrude Reports sought his opinion on the ideal time for the country to join the output cap regime, not forgetting that the country’s crude loading data for August showed 2 million barrels per day and he said, “ I am not even talking about us joining the output cap in August. Next year will be perfect,” he said.
Kachukwu had recently said that Nigeria would join the cap deal once its production hits 2 million per day.
Nigeria has been invited alongside Libya.
Both countries have kept increasing outputs since their exemption from the cut deal.
Nigeria was exempted due to an uprising in the Niger Delta which crippled the country’s oil production to as low as 1 million barrels per day.
Libya on its part was faced with political unrest which also affected output.
Issam Almarzooq said both countries would be asked to cap production in order to support the market.
The meeting would hold in St. Petersburg, Russia, on July 24.
Almarzooq is chairman of the committee monitoring the compliance of OPEC and non-OPEC suppliers with output cuts that started in January and have been extended to March.
“We invited them to discuss the situation of their production,” Kuwait’s oil minister, Issam Almarzooq said on Monday.
“If they are able to stabilize their production at current levels, we will ask them to cap as soon as possible. We don’t need to wait until the November meeting to do that,” he said, referring to the upcoming OPEC meeting scheduled for Nov. 30.
Prices of crude fell last month due to market concerns that the cuts from other producers are being disrupted by production in Nigeria, Libya, Iran and U. S shale producers.
Libya’s oil output has climbed to more than 1 million barrels a day for the first time in four years, while Nigeria’s production rose 50,000 barrels a day in June.
Afolabi’s stand supports what Abdulsamad Al-Awadhi, a London-based analyst and Kuwait’s former representative to OPEC, said about Nigeria and Libya capping so soon.
Abdulsamad said although asking the two countries to cap might reduce supply, adding that Nigeria and Libya should be allowed to recover their lost quotas.
“Capping Libya and Nigeria might help but won’t cut the supply by much,” Abdulsamad Al-Awadhi, a London-based analyst and Kuwait’s former representative to OPEC, said Monday.
“OPEC needs to have better compliance, and it must respect the right of Libya and Nigeria to go back to the market. Other countries that raised output while Libya and Nigeria are out should do more and give space to these two countries to go back to the market.”