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Nigeria will be further exempted from OPEC output cut, says Kachikwu

Nigeria will be further exempted from OPEC output cut, says Kachikwu
September 14
09:43 2017
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Emmanuel Kachikwu, minister of state for petroleum resources, says Nigeria will again get exempted from production cuts agreed on by the Organisation of Petroleum Exporting Countries (OPEC).

Nigeria was first exempted for six months and the second time, for nine months, in OPEC’s decision to cut crude production to reduce supply glut and increase oil prices.

NAN reports that the minister made this known while speaking to journalists in Abuja on Wednesday, adding that at the expiration of Nigeria’s crude-cut exemption in March 2018, a further exemption would be inevitable.

“So, the question is when do we join but I will recognise stability if I can consistently say that for at least six months, I’ve seen average daily productions that are within the umbrella of 1.8 million barrels,” he said.

“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.

“If my numbers are not showing stability (but if we are fine before then) and stability arises (but this is already September so March is really six months).

“It’s very unlikely that I can see stability that convinces me with certainty and predictability that I should exit the exemption between now and March.”

Some OPEC members had expressed concerns as Nigeria’s production had increased while other countries cut back output, but Kachikwu said he had no plans to jeopardise OPEC’s rules.

He said: “We are going to be very transparent on this; I was the ex-OPEC President, we have the OPEC Secretary-General from Nigeria. So, my intent definitely cannot be to play games with this but at the same time we have to be very realistic.

“We are committed to the OPEC position; we are committed to the cut principles. We’ll do our best to align as soon as our colleagues begin to feel that we are stable enough.

“I, however, found working with Russia, working with Saudi Arabia and all the other OPEC members that they usually will be very honest in terms of looking at the data.

“They have their own secondary sources to determine what it is that we produce and they are able to see what the numbers are.”

He reiterated that Nigeria was given the 1.8 million bpd maximum production, adding that it would not change.

“We won’t be cutting from the 1.8 million but bear in mind that our production is 2.2 million barrels even though we’ve now moved condensates out of it. So, the exemption was that we’ll not exceed 1.8 million so anything above 1.8 million we’ll cut, not including condensates,” he added.

“When we finish repairing our infrastructure, our capacity is going to be huge. I think this country has potential capability to raise production to 2.5 million barrels so there will be quite some sacrifices that we will have to make to align ourselves with everybody.”

Kachikwu said it would take some time to repair all the oil facilities that have been damaged.

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