By Nse Anthony-Uko
(Sundiata Post) – Nigeria has been given another extension in respect of oil production output ceiling, thereby raising hope of her recovering fully from the economic recession she just marginally exited recently.
The meeting of the Joint Ministerial Monitoring Committee of OPEC and Non OPEC countries ended in Vienna on Friday afternoon, endorsing Nigeria’s position that the exemption granted it at the November 2016 Ministerial Conference and extended by the May Ministerial Conference should be sustained until it stabilises its crude oil production Industry watchers had expressed fears that because her crude oil production had recently hit an average of 1.8 million barrels and about 500,000 barrels of condensates thereby making the total oil production to hit 2.3 million barrels per day, the meeting would ask her to put a cap on her production.
This steady improvement in some quarters is seen to be contributing significantly to global oil glut, which has tremendously affected the price of the commodity on a downward trend.
Emmanuel Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, who led Nigeria’s delegation to the meeting, had argued that although Nigeria’s production recovery efforts had made some appreciable progress since October last year, Nigeria was not yet out of the woods.
Kachikwu noted that even though Nigeria hit 1.802 million barrels per day in the month of August that was not enough justification for a call by some countries for Nigeria to be brought into the fold.
He emphasised that Nigeria, as one of the older members of OPEC, would continue to work for the good of the Organisation and its member countries, respecting whatever agreements and resolutions collectively made. Nigeria will be prepared to cap its crude production when it has stabilised at 1.8 million barrels per day, he said.
Although Nigeria is not a member of the five nation Joint Ministerial Monitoring Committee, it had gladly accepted the invitation of the co-chairs of the Committee and the OPEC Conference President to attend the meeting because it believes the committee is doing a good job and needs to be supported and also to clarify Nigeria’s position on its crude oil production, the minister said.
The meeting noted that overall compliance by OPEC and non-OPEC participating countries to the agreement on crude oil production cut for the month of August was 116 percent, the highest since the agreement came into effect January 2017. It further noted that the objectives of the accord were steadily being achieved with the gradual draw-down of inventories by nearly 50 percent since the agreement came into effect. It is good news for the Nigerian economy as the price of crude oil stood at $54.59 per barrel.
Her external reserve hits about $33 billion last month, no thanks to the uninterrupted crude oil production for that period. This development is no doubt a big boost to Nigeria, a country whose economy depends solely on crude oil as major source of foreign exchange earnings. The 2017 budget benchmark was put at $44.5 per barrels.
The country’s recent exit from the recession has been as a result of steady rise in the price of the commodity and cessation of hostilities from the Niger Delta militants that have stopped breaking pipelines and allowing the crude production to grow steadily.