The Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, have committed to continuing with plans to gradually increase oil production by 400,000 barrels a day next month, as the alliance shunned calls from key consumers to pump more.
This formed part of its key resolutions at the 22nd OPEC and non-OPEC Ministerial Meeting, held recently, via videoconference.
The cartel maintained its stance, as agreed at the 19th OPEC and non-OPEC Ministerial Meeting, to increase combined crude quota by 400,000 barrels a day monthly from August 2021 until April next year, and by 432,000 b/d a month from May 2022 until last year’s cuts are fully unwound. The increases must be rubber-stamped at monthly ministerial meetings and can be paused for up to three months if market conditions warrant it.
Following this new agreement, Nigeria is expected to produce 1.66 million barrels a day of crude in December, higher than the current 1.4 million barrels per day being recorded.
Be that as it may, the nation’s crude output stands at 1.88 million barrels per day (bpd) in the 2022 budget. Although, findings show that its agreement with OPEC is roughly 1.47 million bpd.This is even as the Federal Government continues to raise hopes of producing between 2.4million to 3million barrels per day of crude very soon.
The meeting further resolved to reiterate the critical importance of adhering to full conformity and to the compensation mechanism, taking advantage of the extension of the compensation period until the end of December 2021.
It reaffirmed the continued commitment of the Participating Countries in the Declaration of Co-operation (DoC) to ensure a stable and a balanced oil market, the efficient and secure supply to consumers and to provide clarity to the market at times when other parts of the energy complex outside the boundaries of oil markets are experiencing extreme volatility and instability, and to continue to adopt a proactive and transparent approach which has provided stability to oil markets.
The 23rd OPEC and non-OPEC Ministerial meeting has been scheduled to hold on the 2nd of December, 2021.
