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Nigeria to cap oil production output at 1.8mbpd early next year

by OLUSOLA BELLO

October 24, 2017 | 4:57 pm
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Barring any unforeseen circumstances, Nigeria will finally join it OPEC counterparts in capping it daily crude oil production output early next year. This is when it must have stabilised at 1.8 million barrels per day, Emmanuel Kachikwu, Minister of State for Petroleum has said.

 

The country’s daily production currently stands Nigeria currently produces between1.6 to 1.7 million barrels per day. But when this is added to about 500,000 barrels of condensate  produced per day,  the total production per day comes to between 2 million or 2.1 or 2.2 million barrels per day.

 

“Nigeria is targeting oil production of 1.8 million barrels per day by early next year but that will be the ceiling to comply with OPEC targets”,  the minister said.

 

She had voluntarily agreed to limit its oil output to 1.8 million barrels per day sometime in June this year.

 

Emmanuel Ibe Kachikwu who spoke at an oil conference in Cape Town said that oil prices were encouraging but OPEC was not ruling out further cuts.

 

The target follows the relative peace and cessation of hostilities by militants in the Niger Delta region which has brought back oilfields into production with pipelines freely supplying crude to export terminals  for onward transportation to the global market.

 

Along with Libya and Venezuela, Nigeria is an OPEC wildcard and exempt from the production cuts which started in January. However, Nigeria along with Libya have been offsetting OPEC’s reduction, adding nearly 100,000 barrels per day  in output from May to June alone, a quarter of OPEC’s total increase.

 

Niger Delta insurgency has been the major disruption to oil production in the region. The main militant group, the Delta Avengers most common strategy has been to attack oil pipelines and production platforms in order to strike at the heart of the Nigerian economy and Federal Government budget.

 

Oil pipelines attacks had lowered oil output from 1.9 million barrels in the fourth quarter of year 2015 to 1.4 million barrels per day in the first quarter of 2017.

 

The country’s production is recovering, keeping oil prices lower than when OPEC first announced its cuts.

 

The Organisation of the Petroleum Exporting Countries, OPEC,  in September ratified Nigeria’s continued exemption from crude oil production cap at the meeting of the Joint Ministerial Monitoring Committee of OPEC and Non-OPEC countries, which  was held in Vienna, Austria.

 

The meeting 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.

 

 

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by OLUSOLA BELLO

October 24, 2017 | 4:57 pm
12893  |   93   |   0  |   Start Conversation

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