The federal government has expressed its readiness to abide by the resolutions reached by the Organisation of Petroleum Exporting Countries (OPEC) and non-member partners on Saturday to extend crude oil output cuts.
OPEC+ agreed to slash daily production of oil by 9.7 million in April, a deal that has seen the international oil prices recover in recent weeks.
However, Nigeria had acknowledged not being able to meet its own quota of the output cut, with the Minister of State for Petroleum Resources, Mr Timipre Sylva, admitting that the country could only partially comply with the agreement to the tune of about 52 per cent.
The oil cartel, led by Saudi Arabia, however, pressured defaulting countries, including Iraq, Nigeria, Angola, Kazakhstan, who have now agreed to compensate for their inability to meet their quota by making deeper cuts in the next three months.
Sylva, in a statement yesterday in Abuja by his Special Adviser on Media Affairs, Mr. Garba Deen Mohammad, noted that Nigeria has now resolved to cooperate fully with the decisions of OPEC+.
While commending the leadership shown by Saudi Arabia and Russia, Sylva stressed the need to work jointly to slowly stabilise the international oil market, which has been badly impacted by the COVID-19 pandemic as well as the initial price war between Russia and Saudi Arabia.
“Nigeria will continue collaborating with other OPEC+ nations in the historic efforts to adjust crude oil production towards rebalancing and stabilising the global crude oil market for the benefit of all.
“Nigeria reaffirms its commitment, alongside its OPEC+ counterparts to extend the first phase of the production adjustments of 9.7 mb/d by one month until the end of July 2020.
“Nigeria also subscribes to the concept of compensation by countries that are unable to attain full conformity (100 per cent) in May and June 2020 to compensate for it in July, August and September 2020,” the federal government said.
The cut for Nigeria during the April deal was about 417,000 barrels per day (bpd), which is about 23 per cent of its production. But for May, the country was only able to reduce daily production by just over 200,000 barrels per day.
However, Sylva explained that all was now set to fully comply with the agreement, which has seen several of the participating countries slash their own outputs.
He said: “We are in full alignment with the decision to closely monitor the market dynamics and it is our conviction that the current gradual recovery being witnessed will be sustained to full traction.
“We reiterate our resolve to conform with the decisions reached under the auspices of the 11th OPEC/Non-OPEC Declaration of Cooperation meeting.
“Nigeria appreciates the commitment of OPEC+ group under the able leadership of Saudi Arabia and Russia towards ensuring the success of this historic intervention”.
For May, OPEC+ compliance with the deal was about 89 per cent, meaning the group fell some 1.1 million barrels short of the target set in the April agreement, which saw crude futures, the global benchmark of prices, rising 5.8 per cent to $42.30 a barrel at the weekend, the highest level since early March.