From Uche Usim, Abuja and Adewale Sanyaolu
Minister of State for Petroleum Resources, Dr Ibe Kachikwu yesterday disclosed that Nigeria will fully stick crude oil production freeze policy being espoused by the Oil Producing Exporting Countries (OPEC) as a way of shoring up oil prices in the international market, despite its adverse shaks on the domestic economy.
Addressing journalists in Abuja yesterday, the Minister said he was also in talks with both OPEC and non-OPEC member countries to fully key into the oil cut deal, even as he hinted that crude oil price was $44.70 a barrel.
According to him, “the OPEC position is also what I want to canvass when I will host Ministers of African Oil Producing Countries later this month because it favours all parties. As at today, oil price $44.70 a barrel and we are below the $50 mark. The reason for not hitting the $50 target is as a result of increasing shale production. For now, we are doing 1.7 million barrels per day.
“But we are recovering well. It is gradual. We are also getting militants cooperation. We hope to get to the predictable comfort level. We can then go to OPEC and see how we can contribute. We will be active in OPEC”, he said. The Minister admitted that the oil cut deal has its impact on the budget by way of revenue cut.
“The budget impact is there. We have lost four months we did not produce as against what the budget projected.
But the Federal Executive Council (FEC) and the Finance Minister are working on buffers. We are cutting down expenses. So many capital projects will be affected. “But we have to work of addressing on containing the effect”, he said. Meanwhile, Nigeria’s average crude oil production, now at 1.733 million barrels per day (bpd) may have become a source of worry to the Organisation of Petroleum Exporting Countries (OPEC).
The cartel equally revealed that Nigeria’s oil production is at a two-year high and that, that in itself may be a problem for the cartel and the country.
The cartel in its monthly oil market report for July 2017, said Nigeria’s oil output hit an average of 1.733 million bpd, according to secondary sources. The last time Nigeria crossed the average 1.733 was late 2015, before the return of oil facility vandalisation in the Niger Delta. According to OPEC, the average for 2015 was 1.839 million bpd.
The Vienna-based oil cartel, however, added that the increase in production in Nigeria and Libya, was fuelling an oversupply, which has driven oil prices down by 7 per cent across the globe. “A rebound in Libyan and Nigerian production added pressure to an already amply supplied Atlantic Basin due to a massive increase in US shale oil production, while demand from Asia was weaker on account of upcoming refinery maintenance and unfavourable arbitrage economics,” OPEC said.