Nigeria yesterday got the approval of the Joint Ministerial Monitoring Committee (JMMC) of OPEC and non OPEC countries to extend its exemption crude production cut.
The JMMC asserted that the country’s request to be allowed to stabilize its crude production level.
It is believed that the position will enable the country to benefit from the rising stability in the price of the commodity in the global market in recent time.
This more so as it is coming at a period when the price of crude oil is hovering around $57 per barrel.
A statement issued by the ministry of Petroleum Resources in Abuja yesterday noted that at the end of the JMMC meeting in Vienna on Friday afternoon, the committee endorsed Nigeria’s position that the exemption granted it at the November 2016 Ministerial Conference and extended by the May Ministerial Conference should be sustained until it stabilizes its crude oil production.
According to the statement signed by director of press, Idang Alibi, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who led Nigeria’s delegation to the meeting argued that although Nigeria’s production recovery efforts have made some appreciable progress since October last year, the country is not yet out of the woods.
The minister was quoted to have said even though Nigeria hit 1.802 million barrels per day in the month of August that was not enough justification for a call by some countries for Nigeria to be brought into the fold.
Kachikwu was said to have emphasized that Nigeria, as one of the older members of OPEC, will continue to work for the good of the organization and its member countries as well as respect whatever agreements and resolutions that are collectively made.
He stated that Nigeria will be prepared to cap its crude production when it has stabilized at 1.8 million barrels per day.
Kachikwu said that although Nigeria is not a member of the five-nation Joint Ministerial Monitoring Committee, he had gladly accepted the invitation of the co-chairs of the committee and the OPEC conference president to attend the meeting because he believed that the committee was doing a good job and needed to be supported, and also to clarify Nigeria’s position on its crude oil production.
The meeting noted that overall compliance by OPEC and non OPEC participating countries to the agreement on crude oil production cut for the month of August was 116 per cent, the highest since the agreement came into effect on January 2017.
It further noted that the objectives of the Accord were steadily being achieved with the gradual draw-down of inventories by nearly 50 per cent since the agreement came into effect.
Meanwhile, at its fifth meeting yesterday, the JMMC welcomed the participation of Iraq, Libya and Nigeria, and the reaffirmation of their commitment to work closely with other participating producing countries to ensure the success of the declaration of cooperation.
The president of the OPEC Conference, Khalid Al-Falih, who is also the Saudi Arabian Minister of Energy, Industry and Mineral Resources, expressed his solidarity with the JMMC and reiterated the commitment of his country to the success of the agreement.
Although he cautioned against complacency, Al-Falih reaffirmed the need for additional work by under-performing participating countries to raise their levels of compliance to 100 per cent.
He said the level of compliance in August 2017 underscores the commitment of participating producing countries to cooperate towards the rebalancing of the market.
Noting recent market developments, the committee said it was confident that the oil market was moving in the right direction towards the objectives of the declaration of cooperation.
Recent market inventory confirmed that global oil demand growth in 2017 was now better than expected, with 2018 world oil demand anticipated to be robust.
“Commercial oil stocks in the Organisation of Economic Cooperation and Development, OECD fell further in August and the difference to the latest five-year average has been reduced by 168 million barrels since the beginning of this year”, the OPEC Secretariat report said.