Kachikwu: ‘Nigeria’s compliance with OPEC’s deal stabilised prices’

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Nigeria’s compliance with the Organisation of Petroleum Exporting Countries’ (OPEC+) production cut deal in February helped to stabilise global oil prices.

Minister of State for Petroleum Emmanuel Ibe Kachikwu, who stated this in an interview, said: “We’re basically complying, effective February with the country’s pledged 53,000 barrel-a-day reduction.

“The price fluctuations mean OPEC needs to be a bit more together, a bit more determined to try to defend the market,” he said.

Nigeria actually boosted crude production by 52,000 barrels a day to 1.792 million in January, according to third-party estimates compiled by OPEC’s secretariat.

However in February, the country was compliant with its agreed 1.685 million barrel-a-day limit, Kachikwu said, adding that the producers’ group will meet again in April to discuss whether to continue the supply reductions in the second half.

Nigeria would have a hard time making deeper cuts, the minister said. “If more cuts need to come, there would be major challenges because between December and now we’ve had the Egina field come online,” Kachikwu said. The offshore field, operated by French energy giant Total SA, hasn’t yet reached its maximum production level of about 200,000 barrels a day, but may do so in March, he said. Some of that output is a light oil called condensate, which isn’t counted in the OPEC+ deal, and some is crude, he said.

OPEC and allies agreed to reduce output by 1.2 million barrels a day in the first half of this year in order to prevent a supply glut.

While the deal has contributed to a jump in crude prices of more than 20 per cent so far this year, implementation has been uneven, with Saudi Arabia cutting deeper and faster than promised and other nations including Russia going slow.

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