Oil: Nigeria agrees to reduce production to comply with OPEC quotas
Under pressure from key members of the Organization of Petroleum Exporting Countries (OPEC), who had been urging it for months to reduce its crude oil production in accordance with the quotas set, Nigeria finally complied.
The announcement, with immediate effect, was made on Tuesday, October 1 by Mele Kolo Kyari, CEO of the Nigerian National Petroleum Corporation (NNPC), the Nigerian national hydrocarbon company. The leader, who was on a trip to Fujairah, United Arab Emirates, said at the same time that Nigerian crude and condensate production for September had been « 2.1 to 2.2 million barrels per day ». This is 265,000 barrels/day above its authorised quota over the period, and not commensurate with the overproduction recorded in the other Member States (Iraq, Congo, Ecuador and Gabon).
As a reminder, last December OPEC, which includes 14 countries, concluded an agreement with producers not affiliated to the organization, with a view to a global reduction set at 1.2 million barrels/day and taking effect from 1 January 2019, the objective being to stabilize oil prices, which fell by more than 30% over the past year. Under the agreed terms, 800,000 barrels/day of this reduction would be assumed by the Member States while the remaining 400,000 barrels/day would be absorbed by non-corel countries.
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However, the NNPC director said that, beyond this temporary effort, Nigeria hoped to increase its production to about 3 million barrels/day within « the next two to three years ». This is a reminder that the Nigerian authorities intend to continue to draw on their oil resources to boost the growth of Africa’s leading economic power, which has been in difficulty since 2016.