The OPEC Secretary-General, Mohammad Barkindo, said on Monday that Nigeria does not intend to go beyond its oil production target of 1.8 million barrels per day (bpd) until the end of March 2018.
Mr. Barkindo who made this known at the opening of the fourth Joint OPEC-non-OPEC Ministerial Monitoring Committee (JMMC) in St. Petersburg, Russia, also said Libya has an output target of 1.25 million bpd by December, but it remains a target given the challenges the country faces.
OPEC and some non-OPEC states including Russia agreed in 2016 to cut production by 1.8 million barrels per day (bpd) in a deal that has been extended to March 2018. The crude oil cartel had moved to cap Nigerian oil output and called on several members to boost compliance with production cuts to help clear excessive global stocks and support flagging prices. Libya and Nigeria, were exempted from the limits to help their oil industries recover from years of unrest.
The deal to curb output propelled crude prices above $58 a barrel in January but they have since slipped back to between $45 and $50 dollars as the effort to drain global inventories has taken longer than expected. Rising output from U.S. shale producers has offset the impact of the output curbs, as has climbing production from Libya and Nigeria.
A ministerial committee of OPEC and non-OPEC states that monitors the global oil pact said it had agreed Nigeria would join the deal by capping or even cutting its output from 1.8 million bpd, once it stabilizes at that level from 1.7 million bpd recently.
The monitoring committee, known as JMMC and which met in the Russian city of St Petersburg, did not give the timeframe for when this would happen, saying it would track Nigerian production patterns in the next weeks.
The committee did not back capping Libyan output as it said its production was unlikely to exceed one million bpd in the near future compared to its capacity of 1.4 million-1.6 million bpd before unrest erupted in 2011 and plunged the nation into chaos.
Brent oil prices rose about 1 per cent at about $48.50, helped by news of a cap on Nigeria and by comments from Saudi Energy Minister, Khalid al-Falih, that the kingdom’s exports would fall to 6.6 million bpd in August as demand at home was rising, effectively representing a cut of 1 million bpd year-on-year.
He said global stocks had fallen by 90 million barrels, but were still about 250 million barrels above the five-year average for industrialized nations, which is the level OPEC and non-OPEC states are targeting with their output curbs.
“Libya and Nigeria, both of which are exempt from our agreement [on oil output cuts] … of course, we remain supportive of our brothers and partners in both nations as they work on the recovery of their oil industries and their economies,” he said.
He said the market had faced pressure in recent weeks due to weaker OPEC compliance with cuts and rising production from Libya and Nigeria, which have been exempt from the reductions.