Nigeria’s crude oil production would drop to 43,775 barrels per day, following the decision by the Organisation of Petroleum Exporting Countries (OPEC) to cut Nigeria’s production to 800,000 barrels at its meeting in Vienna, last Friday.
Other OPEC members expected to cut their production volumes as follows: Algeria with October production level at about 1.07 mbpd (26,750 barrels); Angola, 1.457mbpd (36.43 barrels); Congo, 324,000bpd (8,100 barrels), Ecuador, 525,000 (13,125 barrels); Equatorial Guinea, 131,000 bpd (3,275 barrels); Gabon 186,000 bpd (4,650 barrels) and Iran, 3.296 mbpd (82,400 barrels).
Iraq, which produced 4.653 mbpd in October will cut about 116,325 barrels; Kuwait 2,.764mbpd (69,100 barrels); Libya, 1.114 mbpd (27,850 barrels); Saudi Arabia 10.642mbpd (266,050 barrels); United Arab Emirate 3.160 mbpd (81,750 barrels) and Venezuela 1.171 mbpd (29,275 barrels).
But, a communique at the end of the 175th meeting of the 15-member oil group in Vienna, Austria on Friday said the cut was subject to a review in April 2019.
In the communique, OPEC said the latest cut, which would help stabilise and strengthen crude oil prices at the international oil market, would be based on members’ October oil production levels.
Nigeria has consistently been producing below the 2.3 million barrels daily benchmark in the approved budgets, since 2016.
The latest cut will further reduce the output level by 43,775 barrels, in line with Friday’s resolution.
OPEC’s secretariat production data of member countries contained in the latest monthly oil market report published on Friday showed Nigeria’s daily oil production has maintained a low profile for years.
After Niger Delta militants attacked oil facilities in 2015, cutting the country’s oil production by almost 50 per cent, the capacity has crawled slowly from an average of 1.6 million barrels in 2016 to about 1.7 million barrels in 2017 and 2018.
In September, OPEC’s secretariat secondary sources put Nigeria’s daily production capacity at about 1.768 million barrels, before dropping by about 17,000 barrels to 1.751 million barrels in October.
But, direct communication sources, according to the group’s monthly report, gave the figure as 1.634 million barrels in September, up by about 138,000 barrels to about 1.772 million barrels in October.
Based on Friday’s resolution, which said OPEC’s latest output cut by 2.5 per cent would be based on October production levels, Nigeria’s production is expected to drop by a minimum of 43,775 barrels to about 1.71 million barrels per day, effective January 2019.
Nigeria’s representative in OPEC, Mele Kyari, told PREMIUM TIMES on Saturday there was no reason for Nigerians to worry over the impact of the cut on the country’s oil output projections.
“The OPEC decision to cut the output of members affects only Nigeria’s regular oil production, and not condensate,” Mr Kyari, who is also the general manager, Crude Oil Marketing Division of the Nigerian National Petroleum Corporation (NNPC), said.
Condensates are gas hydrocarbons, often classified as ultra-light oil, extracted in liquid form during the oil drilling process.
Although the exact volume of condensates Nigeria produces remains unknown, NNPC data seen by the Nation revealed it could be as high as 500,000 barrels per day.
The data showed the volume was as high as 511,000 barrels per day in 2011, before dropping to about 398,000 barrels in 2017.
Prior to the crucial meeting in Vienna, which later saw members reach a consensus on the latest cut, Minister of State for Petroleum Resources, Ibe Kachikwu, told Bloomberg how ”very difficult” it would be for Nigeria to cut its current daily production capacity.
The minister, however, noted that since it was the consensus by the group to act, to stabilise the market and boost prices, it was important for all members to be seen to be contributing something.
Nigeria got three exemptions from previous output cuts between January 2017 and July 2018, which allowed OPEC bring production and supply to a balance.
OPEC’s decision to cut members output followed reviews of various reports, including those of its Secretary-General, the Joint Ministerial Monitoring Committee (JMMC), the Joint Technical Committee (JTC), the OPEC Secretariat, and the Economic Commission Board.