As the Organisation of Petroleum Exporting Countries is keen to extend efforts to ward off oil supply glut and prop up prices, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said it is very difficult for Nigeria to reduce its crude oil production.
Global oil benchmark, Brent crude, which rose to a four-year high of $86.74 per barrel in October, fell below $60 per barrel in November. It stood at $59.96 as of 6.20pm Nigerian time on Thursday.
Kachikwu, who spoke on ‘Bloomberg Daybreak: Europe’ on Thursday ahead of the OPEC meeting in Vienna, said there was a need for an extension of production cuts to stabilise the global oil market.
The production cuts deal, which began on January 1, 2017, indicated that OPEC countries and 10 non-OPEC producers led by Russia would cut a combined 1.8 million barrels per day in supplies to tackle oversupply and prop up prices. It was later extended till the end of 2018. Nigeria and Libya were exempted from the cuts as they dealt with internal unrest that had targeted their oil infrastructure.
Asked if Nigeria would be able to reduce production, Kachikwu said, “It is very difficult to do that but where we are now, everybody must be seen to contribute. Obviously, the smaller it is, the more amenable we are to participate; the larger it is, the more we will struggle to participate.
“We have got exemption three times understandably. This time round, I think there is a decision that everybody should be seen to chip in.” According to the minister, Nigeria’s oil production is currently around 1.73 million to 1.74 million barrels per day. Last month, Saudi Energy Minister Khalid al-Falih travelled to Libya and Nigeria to press them on the exemptions, though no public commitments were announced.
Falih, after meeting with his Nigerian counterpart, Kachikwu, in Abuja, said some OPEC members were complaining in the summer that the two countries were overproducing and contributing to rising OPEC production.