Abuja — The Organisation of Petroleum Exporting Countries (OPEC) Thursday gave Nigeria and three other countries Monday deadline to submit a schedule of the oil production cut compensation plan , following their failure to fully comply with an April deal aimed at cumulatively reducing production by about 9.7 million barrels daily.
The three other countries yet to submit their plans include Angola, Gabon and Azerbaijan, while Iraq and Kazakhstan, have taken steps to fulfill their obligations to the cartel.
A statement issued Thursday after the 19th Joint Ministerial Monitoring Committee (JMMC), which was held via videoconference, under the chairmanship of Saudi Arabia's Minister of Energy, Prince Abdul Aziz Bin Salman,, and co-Chair, Mr. Alexander Novak, who is the Minister of Energy of the Russian Federation, noted that sticking with the cuts as promised was not only the fair thing to do, but also an equitable move.
The committee said it reviewed the monthly report prepared by the Joint Technical Committee (JTC) and recent developments in the global oil market, as well as immediate prospects for the remainder of 2020 and into 2021.
It mandated the OPEC secretariat to reach out to countries that are still defaulting to extract a commitment from them that their product cut plan was still active.
"The committee emphasised the critical importance of adhering to full conformity and compensating the overproduced volumes in the months of May and June, during the months of July, August and September 2020, in accordance with the statement of the 11th OPEC and non-OPEC Ministerial Meeting of the DoC (June 6, 2020), in particular with reference to the five elements agreed.
"The committee would like to thank those participants, namely Iraq and Kazakhstan, which have already submitted their compensation schedules, and agreed to give other underperforming participants, which have not yet submitted final plans, until next Monday, June 22, 2020 to submit their schedules for compensation to the OPEC Secretariat.
"Furthermore, the committee mandated the secretariat to reach out to all the underperforming participating countries to submit their schedules for compensation by the above mentioned date" OPEC said.
It stressed that the attainment of 100 per cent conformity from all participating countries was not only fair and equitable, but vital for the ongoing and timely rebalancing efforts and helping deliver a sustainable oil market stability.
It reiterated its earlier position to extend the first phase of the production adjustments by a further month, now till July 31, 2020, and subscribing to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and
OPEC added: "Thee committee took note of the overall conformity of 87 per cent for the month of May 2020. It also observed individual country conformity levels and reiterated the critical importance that all participating countries achieve their 100 per cent level.
"They will also make up for any monthly shortfalls in the months of July, August and September. It welcomed the expressed commitments from those countries below the 100 per cent May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September"
The committee stated their appreciation of additional voluntary contributions totalling 1.2 million barrels per day made by Saudi Arabia, the UAE, Kuwait and Oman in the month of June 2020.