Nigeria joined 22 other countries comprising the Organisation of Petroleum Exporting Countries (OPEC) and its allies to collectively cut 9.7 million barrels a day of crude oil from global markets. The unprecedented agreement, sealed on Sunday, was designed to address a mounting oil glut resulting from the coronavirus pandemic’s drastic erosion of oil demand.
Saudi Arabia, Russia and the U.S. agreed to lead the multinational coalition in major oil-production cuts after a month-long Saudi-Russian feud.
The deal came after President Trump intervened to help resolve a Saudi-Mexico standoff that jeopardized the broader pact.
Commenting on the development, the Minister of State, Petroleum Resources, Mr Timipre Sylva, said the pact will enable the rebalancing of the oil markets and galvanise the expected rebound of prices by $15 per barrel in the short term.
“This also promises an appropriate balancing of Nigeria’s 2020 budget that has been rebased at $30 per barrel.
“As agreed, Nigeria will join OPEC+ to cut supply by 9.7 million barrels per day between May and June 2020, 8 million barrels per day between July and December 2020 and six million barrels per day from January 2021 to April 2022, respectively.
“Based on reference production of Nigeria of October 2018 of 1.829 million barrels per day of dry crude oil, Nigeria will now be producing 1.412 million barrels per day, 1.495 million barrels per day and 1.579 million barrels per day respectively for the corresponding periods in the agreement.
“This is in addition to condensate production of between 360-460 KBOPD of which are exempt from OPEC curtailment”, he stated.