Nigeria is ready to make the sacrifice and cut its oil production deeper if OPEC and allies decide in December that it is necessary to deepen the cuts, Nigerian Minister of State for Petroleum Resources, Timipre Sylva, told Bloomberg in an interview on Friday.
Nigeria has been one of the largest overproducers and non-compliant OPEC members in the production cut deal this year. Nigerian overproduction has offset some of the cuts of its fellow OPEC members at a time when the oil market continues to be oversupplied with rising U.S. production and faltering oil demand growth.
Asked if he thinks that the OPEC+ group would need to make deeper cuts to prevent a surplus next year, Sylva told Bloomberg that the oil market is unpredictable right now.
“But if we need to make deeper cuts in December, we’ll make cuts,” he said, adding that “We cannot allow prices to just plummet now.”
“If things are going southward, we’ll have to do some more cuts, and we are ready to make that sacrifice,” the Nigerian minister said.
The biggest OPEC producer in Africa has been pumping 1.8 million bpd of crude oil year to date, Sylva told Bloomberg.
“We had some overproduction in August, but we committed to cutting now, and we cut down in September, and we are going to fully comply from October,” he said.
Iraq and Nigeria—the two rogue members of OPEC that haven’t been complying with their share of the production cuts in recent months—pledged last month to fall within their respective caps while the cartel and its allies are trying to rebalance the oil market. Nigeria has promised to reduce its oil production by 57,000 bpd.
In August, Nigeria pumped 1.866 million bpd, up by 86,000 bpd from July, according to OPEC’s secondary sources that the cartel uses to calculate official production and compliance rates. Nigeria’s cap as part of the deal is 1.685 million bpd.
Due to the U.S. sanctions, Iran and Venezuela—exempt from the cuts— have been inadvertently helping OPEC with the reduction of production, but rogue members such as Iraq and Nigeria have been derailing the cartel’s efforts to secure full compliance from all.