The Minister of State for Petroleum Resources, Timipre Sylva, has indicated Nigeria would be reducing oil production by more than 300,000 barrels per day, in line with the historic output cut agreed by OPEC+ on Sunday.
The output cut was initially put at 10 million barrels per day but was however reduced to 9.7m following a compromise with Mexico.
Sylva spoke about the effect of the output reduction on Nigeria at the webinar ministerial meeting of 9th Organisation of Petroleum Exporting Countries, OPEC, and Non-OPEC.
Nigeria joined OPEC+ to cut supply by up to 10mbpd between May and June 2020
Eight Million Barrels per day between July and December 2020.
Six Million barrels per day from January 2021 to April 2022, respectively.
Based on reference production of Nigeria of October 2018 of 1.829mbpd of dry crude oil, Nigeria will now be producing 1.412 million barrel per day, 1.495mbpd and 1.579mbpd respectively for the corresponding periods in the agreement.
This is in addition to condensate production of between 360 and 460 KBOPD of which are exempt from OPEC curtailment.
Recall that the Organisation of Petroleum Exporting Countries, OPEC, and its non-OPEC allies, led by Russia, on Sunday finally agreed to cut members’ crude oil production by 9.7 million barrels per day.
This follows last week’s meeting was convened by Saudi Arabia, the group’s largest producer, to mobilise a consensus to cut global oil supply to stabilise the market and halt declining prices.
The meeting became necessary following weeks of oil supply wars between Saudi Arabia and Russia over a proposal to cut oil supply to strengthen the oil market and halt the further decline in oil prices amid the worsening impact of the coronavirus pandemic on the global economy.
The Nigerian economy has been dealt a big blow following the crash in oil price, forcing the Federal Government to cut down the 2020 budget and search for ways to diversify the economy.