At a time the Nigerian economy is looking onto rising output and oil price to rescue the economy from recession, indication has emerged that the Organisation of Petroleum Exporting Countries (OPEC) may be convinced soon to ask Nigeria and Libya to join others in observing cuts so as to further stabilize oil price.
Already, Jabar Ali al-Luaibi, Iraq’s oil minister, has signalled that Nigeria and Libya may be asked to cut oil productions in the new supply cut deal to be reached by the OPEC.
Giving the hint at a press conference in Baghdad on Tuesday, Al-Luaibi expressed Iraq’s readiness to join Saudi Arabia and Russia in the proposed extension of the oil deal by another nine months.
OPEC oil ministers will be meeting in Vienna on Thursday to discuss the future of the global crude oil market and prepare for fresh cuts across board.
Besides, a cut for Nigeria may jeopardise Nigeria’s 2017 budget, which has been benchmarked against an oil production level of 2.2 million barrels per day.
Ali al-Luaibi however added that the production cut be increased from the current 1.8 million barrels per day, hinting that “small oil producing countries” who were excused from the initial deal be made to participate in the new deal.
When OPEC and non-OPEC countries made an historic deal in 2016 to cut global crude oil supply, Nigeria and Libya were excused on the basis that both countries were experiencing low production due to geopolitical unrest.
Business Hilights recalls that the Minister of State for petroleum, Dr. Ibe kchikwu, had said Nigeria will be seeking another six month exemption from the OPEC deal.
Kachukwu had said in Houston during the recently concluded offshore technology Conference (OTC) that “The indications that I have so far is that there is willingness to extending that. I expect we will get OPEC exemption but one year from now will it be renewed? I am not too sure”.
But this may not happen as with the oil cartel seeking more cuts on the next deal to curb oversupply.
