By Chineme Okafor in Vienna-Austria
After two days of touchy negotiations in Vienna capital of Austria, member countries of the Organisation of Petroleum Exporting Countries (OPEC) and their non-OPEC allies led by the Russian Federation, finally broke a deadlock over production limits talks and collectively agreed to cut their outputs by 1.2 million barrels of oil per day (mbd).
Agreeing Friday with its partners to remove 1.2mbd from the market, OPEC countries decided to take up the burden of limiting their production by 800,000 barrels a day (bd), out of which the Minister of State for Petroleum, Dr. Ibe Kachikwu, told THISDAY that Nigeria could contribute up to 40,000bd, representing about 2.5 per cent of her 1.7mb current production level.
Kachikwu, explained that the output cut was as a matter of fact in the best interest of Nigeria, adding that with larger oil volumes in the market weakening prices, Nigeria would have found it difficult to implement its budget for 2019.
However, details of the agreement as stated by the President of the OPEC Conference and Minister of Energy and Industry of the United Arabs Emirate, Mr. Suhail Mohamed Al Mazrouei, and Russian Energy Minister, Alexander Novak, at a press conference after their joint meeting showed that OPEC countries would take out 800,000bd from the market, non-OPEC members would have to take out the balance of 400,000 with Russia contributing as much as 230,000bd of this.
Also, Iran; Venezuela; and Libya were granted exemptions from the cuts because they either suffered sanctions or production disruptions, and would not be able to participate in the cut.
Mazrouei, in his remarks at the briefing, stated that the parties took note of oil market developments since it last met in Vienna in June 2018, and reviewed the outlook for the remainder of 2018 and 2019.
He said in this regards, it observed that current oil supply and demand fundamentals confirm a well accommodated market following the concerted efforts of participating countries in the Declaration of Cooperation (DoC) toward restoring balance.
He also explained that they discussed the increasing market volatility and the broad consensus on the prospects for 2019 that suggests higher supply growth than global requirements, taking into account prevailing uncertainties.