The Ministry of Petroleum Resources, yesterday, revealed why Nigeria was exempted from the decision of the Organisation of Petroleum Exporting Countries (OPEC) to cut oil output.
According to a statement from Office of the Minister of State for Petroleum Resources, the exemption was as a result of strategic negotiations and the worrying incidences of vandalisation of the country’s petroleum infrastructures “which has negatively affected the country’s ability to produce oil optimally in the recent past.”
According to the statement which was signed by the Ministry’s Director of Press, Mr Idang Alibi, the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, led Nigeria’s delegation which secured an exemption from the production cut. The statement noted that member countries at the meeting agreed on the deal where considerations of the cartel offered to Iran, Libya and Nigeria would mean that in 2017, total production might likely increase in these countries, even as other members seek to cut output in the first quarter of next year.
The Ministry declared that the deal would obviously enhance the prospects for the oil and gas industry with the impacts already being felt as oil prices surged more than 8 per cent, hitting a high of $51.84 a barrel. It further stated that a stable increase in oil prices which is one of the rewards that the deal will produce would most likely contribute positively to the stimulation of the economies of member countries including Nigeria that are currently undergoing challenges.
“This landmark deal is coming at a time when Kachikwu is working assiduously with Ministers from other OPEC member countries and Nigeria’s Dr. Mohammed Sanusi Barkindo as the Secretary General of the Organisation, to steer the organization to achieve and sustain unity and competitiveness in the global energy market,” the statement affirmed.
Sharing details of the agreement, the Ministry said that at the 171st meeting held in Vienna, OPEC reached a landmark deal that will effectively cut production by about 1.2 million barrels per day, or about 4.5 percent of current production, to 32.5 million barrels per day. It explained that the agreement follows an earlier meeting held in September in Algeria where each member country reached a consensus on the need to cut production. The deal saw Saudi Arabia agree to take on the highest burden of cuts — a 486,000 barrels a day cut to its output, while efforts are on to persuade Iraq to reach a decision to reduce its output, as well as getting non-OPEC producer Russia on board for a 300,000 barrel-a-day cut. “This will be the first time since 2008 that OPEC would be accomplishing such a feat which is expected to tackle the key challenge of low price of oil in the international market which has affected the global economy with most OPEC member countries.