Nigeria Will Stick to OPEC's Oil Output Quota - NNPC

Photo: Vanguard
15 August 2019

Abuja — Nigeria will not break its commitment to the oil production adjustments agreed upon under the Declaration of Cooperation (DoC) between member countries of the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC countries at their last ministerial meeting on July 2, 2019, the Nigerian National Petroleum Corporation (NNPC), has said.

According to Nigeria's representatives on the OPEC Economic Commission Board and Group Managing Director of NNPC, Mallam Mele Kyari, the country is committed to full compliance with the agreement reached by the parties to the DoC.

To remove excess oil in the international market, OPEC and 10 non-OPEC countries had agreed in December 2018 to cut oil production by 1.2 million barrels per day effective from January 2019 for an initial period of six months to help balance the market and support prices.

At their last meeting, the group extended the cuts by another six months.

Nigeria, which was exempted from the previous production cut deal, was given a new quota of 1.685 million bpd.

The country's daily export is, however, in excess of OPEC quota because it includes condensates, which are excluded in OPEC's agreement.

However, Saudi Arabia's Energy Minister, Khalid al-Falih, has long vowed to do "whatever it takes" to support the oil price.

With al-Falih's position, it is expected that the de facto OPEC leader will lobby the group and its allies to implement deeper cuts when they meet in December.

But a statement from the NNPC yesterday quoted Kyari, to have said: "Right now we are not only committed to the agreement but we have elevated our attitude towards it to the point of complete devotion to the adjustments and we urge other parties to follow suit."

He also expressed optimism that the momentary and artificially induced bearish trends in the oil market would naturally correct itself based on the strong market fundamentals, which have remained steadfast despite the price slid.

He said with a visible steady decline in commercial stock overhang propelled by healthy demand, it was only logical for all advocates of oil price stability like the OPEC and its allies to comply strictly with the agreed production adjustments.

Kyari added that with the increasing volatility of the oil market, it has become commonsensical for Nigeria and all other parties to the agreement to entrench an attitude of unwavering devotion to the deal anchored on full and timely conformity to their obligations.

Similarly, the NNPC and the National Oil Spill Detection and Response Agency (NOSDRA) have expressed their willingness to work closer at mitigating oil spill across the country.

Kyari in another statement, made this known when he received the Director General of NOSDRA, Mr. Idris Musa, along with his management team in his office in Abuja.

He stated that as a national oil company, the NNPC pipelines, flow stations and assets spread across the country were jointly owned by the federation, while it produces crude oil to maintain a balance sheet for the nation.

He said the NNPC had taken several steps to deploy technology to stem oil spill.

"We have taken a number of steps to stem oil spill by deploying technology in order to make sure that whenever there is an oil spill incidence, it is contained almost immediately. We contain the incidences of oil theft, pipeline vandalism and acts of saboteurs and we intend to bring it to the barest minimum," Kyari said.

He stated that the NNPC operated both crude oil and petroleum products pipelines, adding that the corporation is collaborating with all its partners to curb oil spill in all areas of its operations.

According to him, the NNPC will forge closer ties with NOSDRA to forestall oil spill in areas that are prone to incessant incidences.

On his part, Musa, said NOSDRA was prepared to partner the NNPC in mitigating oil spill in all areas of its operations, stressing that the partnership would ensure a good operating environment for the operators and the inhabitants.

He added that incessant breakage of petroleum products pipelines was not beneficial to anyone.

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