Nigeria Achieves OPEC Oil Production Cut Compliance
Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has confirmed that Nigeria reached its crude production quota in December under the OPEC agreement, explaining that OPEC quotas only apply to crude oil production, and not condensate.
For a long inside 2019, the OPEC complained that Nigeria and Iran continued to flout the global body’s directives on oil production cuts. Addressing newsmen at the recently held Atlantic Council Global Energy Forum in Abu Dhabi, Kyari said Nigerian is focusing its production to more gas-based reservoirs so that the country can continue to grow production while maintaining balance in the market.
He revealed that Nigeria’s December oil production was 2.2 million bpd, but refused to disclose quantity of the crude and condensate. He added that the country was fully compliant with its quota of 1.77 million bpd for crude. “We have met our commitment by December,” Kyari said.
Reuters said OPEC oil output dropped to an average of 29.5mn barrels per day (bpd) in December 2019. OPEC output for that month was 50,000bpd lower than in November. Saudi Arabia, which has shouldered additional cuts through 2019 to compensate for other members that did not fully comply with their quotas, has said that it will continue to over comply with cuts, taking approximately 400,000 more barrels per day off the market.
With Nigeria’s compliance, its case is looking different from many other OPEC members, like Iran and Iraq, who battling with compliance. Saudi Arabia and Iraq each cut supply by 50,000bpd, putting Iraq’s compliance at 59%, compared to 23% compliance in November. The UAE made additional cuts in December and production from Kuwait remained steady. Iran and Libya, both exempt from production cuts, decreased output.
Despite the recent attack on US bases in Iraq, OPEC Secretary General Mohammed Barkindo confirmed that Iraq’s oil production is secure and it should be able to reach compliance with the production cuts set by the organisation in December 2019.
“The facilities are secure in Iraq, and their production is continued, unaffected,” Barkindo said during the forum in Abu Dhabi when asked if Iraq and Nigeria could reach full compliance. “We are optimistic that, in the course of time, (Nigeria and Iraq will be able to reach 100% compliance).
“What we are working on now is how we can assist all countries to raise their level of conformity to 100% so we can continue to give comfort to the Kingdom [of Saudi Arabia] that they will be able to play this noble role that they are playing,” Barkindo added.