The organization of petroleum exporting countries (OPEC) this week agreed to extend plans to cut oil production for Nigeria and Libya, two of Africa’s top oil producing nations, until December 2018.
The extension, however, is subject to review at the next OPEC meeting which is scheduled to hold in June next year.
Last year, member countries of OPEC and non-OPEC states agreed to cut production in a bid to curb global oversupply of oil, which caused oil prices to plummet over the past few years. However, Nigeria and Libya have been exempted from these cuts as both countries have struggled with internal crisis, which has disrupted oil production.
Reacting to the further exemption, Minister of State for Petroleum Resources, Dr. Ibe Kachukwu said that Nigeria has been cautioned to be disciplined and not flood global markets with crude.
“We’ve been asked to be disciplined, the word cut has not been used. We’ve resisted the word cut. The word cap has been accepted by me a long time ago,” he said.
“Clearly, there is a continuing obligation to ensure that we do not just flood the market because of the exemptions we were given.
“There’s a lot more energy around bringing everybody to the ballpark, Nigeria is willing to be in that ballpark and contribute.
“Our contribution is fairly limited because we are still lacking yet in that capacity to reach the marks anywhere soon.”
“Our current production is 1.75, we are still below the 1.8 that was the benchmark which is comfortable but you’re going to see a lot more pressure as we go into next year.