•Oil price jumps to $66 on supply cut extension prospect
Ejiofor Alike and Peter Uzuhu with agency reports
The newly-appointed Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari, yesterday said crude oil pricing and volume of production were key factors in ensuring sustainable revenue generation for the country.
Kyari said this in Vienna, while addressing journalists on the sidelines of the 176th Meeting of the Organisation of Petroleum Exporting Countries (OPEC) Conference.
The new NNPC boss, who is Nigeria’s OPEC National Representative, was represented at the meeting by Mr. Bala Wunti.
Kyari, who will assume office on July 8, assured the global audience that Nigeria would continue to support the declaration of cooperation that had helped in restoring stability in the global oil market.
“Through the Declaration of Cooperation, greater stability is restored globally, Nigeria believes that having the right price and volume can support our aspiration and ensure a sustainable revenue generation,” he said.
According to Kyari, a continuation of the declaration was the way to go. He said a six-month extension was too short a time and would not have the required impact in curbing uncertainty and volatility which existed before the cooperation
“So a nine-month extension is the way to go considering the objective of the declaration, that is why Nigeria supports the initiative and is also grateful that big nations are committed to it,” Kyari said.
He further expressed the commitment of the NNPC in revamping refineries, noting that in-country refining of crude through multiple channels and collaboration would ensure the nation becomes a major petroleum product exporter by 2020.
“Nigeria’s objective at today and tomorrow’s OPEC is to support the declaration of cooperation that has so far succeeded in restoration of global oil markets stability. Further to this, Nigeria’s hope is to secure appropriate quota for its export and optimal price.”
Meanwhile, Nigeria has reaffirmed its strong support for the nine-month extension in oil production cut under the ‘’Declaration of Cooperation,’’ which seeks to improve global oil market stability among OPEC members.
Head of the Nigerian Delegation to the meeting, Dr Folashade Yemi-Esan, said this during the press conference, while welcoming the commitment by Saudi Arabia and Russia on the proposed extension.
‘’Nigeria strongly endorses this commendable commitment and support this position, we believe that an extension of nine months is preferable to six months, as it offers greater certainty to the market, thereby reducing market volatility,’’ Yemi-Esan added.
She said that the nation recognised the transformational impact which the ‘’ declaration of Cooperation’’ has had on the global oil market with 24 oil producing countries working together and contributing to improved market stability.
Yemi-Esan who is the Permanent Secretary of the Petroleum Resources ministry noted that the development had benefited consumers and producers as well as impacted positively on the health of the global economy.
He added: “The convening of the 176th Meeting of the OPEC Conference and the 6th OPEC and non-OPEC Ministerial Meeting offers the Nigerian delegation the opportunity to reaffirm our strong support for the ‘Declaration of Cooperation.’
“When the ‘Declaration of Cooperation’ was first signed on 10 December 2016, participating countries recognised the uniquely challenging circumstances in Nigeria, particularly related to the security situation in producing regions of the Niger Delta, and graciously agreed to exempt Nigeria from the voluntary production adjustments. Nigeria appreciates this act of solidarity and thanks all participating countries for their steadfast support during the challenging period.
“Following the 5th OPEC and non-OPEC Ministerial Meeting on 7 December 2018, Nigeria voluntarily agreed to re-commit to the collective endeavor to adhere to adjustments in production levels. We have also supported this undertaking by actively participating and engaging in the Joint Ministerial Monitoring Committee.
“We acknowledge and welcome the recent expression of commitment by the Kingdom of Saudi Arabia and the Russian Federation following the meeting of the G20 in Osaka, Japan, to continue the ‘Declaration of Cooperation’ for a further nine months. Nigeria strongly endorses this commendable commitment and supports this position. We believe that an extension of nine months is preferable to six months, as it offers greater certainty to the market, thereby reducing market volatility.
“With presidential elections over and the reelection of President Muhammadu Buhari, Nigeria will intensify efforts to ensure full conformity with the ‘letter and spirit’ of the ‘Declaration of Cooperation,’ despite the obvious domestic challenges this may pose. We will work to stabilise production by improving the security architecture of producing regions and through continued engagement with local communities, particularly in the Niger Delta region.”
Oil Price Jumps to $66 on Supply Cut Extension Prospect
In a related development, crude oil prices were up yesterday as the OPEC and its allies looked on track to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week.
The global benchmark, Brent crude futures initially rose as high as $66.75 per barrel and finally settled at $65.99 per barrel, $1.25 higher than its Friday price tag.
United States crude futures climbed $1.22 to $59.69 a barrel, after earlier hitting their highest in over five weeks at $60.28.
Iran – under United States sanctions alongside OPEC ally, Venezuela, yesterday joined top producers, Saudi Arabia, Iraq and Russia in supporting an extension of a supply cut deal until at least December.
The OPEC, Russia and other producers, an alliance known as OPEC+, met yesterday and continues today to discuss supply cuts amid surging United States output.
OPEC members agreed yesterday to extend oil production cuts by nine months, an OPEC delegate said.
Kazakh Energy Minister, Kanat Bozumbaev, also confirmed yesterday that most ministers representing OPEC and non-OPEC countries at talks in Vienna favour extending their global oil output deal by nine months.
“The majority (of ministers) have spoken in favour of nine months,” he said.
Iraq’s Oil Minister, Thamer Ghadhban, also said yesterday that his government and the rest of OPEC seek to control global oil inventories and restore balance to the oil market which faces “huge challenges”, according to a ministry statement.
Ghadhban met his Saudi and Russian counterparts on the sidelines of the ongoing OPEC meeting in Vienna.
They discussed oil market developments and exchanged views on extending oil supply cuts, the statement said.
OPEC will hold talks today with Russia and other allies, which Ghadhban said would involve discussing production cuts, compliance of oil producers and market movements.
“Targets set by the oil producers have not been reached yet due to the huge challenges that face the global oil market, and we seek with the rest of (OPEC’s) members to control global inventories and restore balance to the market to support oil prices,” Ghadhban was quoted as saying.
These decisions should be taken unanimously by OPEC’s members, he added.
OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which this year has become the world’s top producer ahead of Russia and Saudi Arabia.
OPEC and its allies look set to extend oil supply cuts this week at least until the end of 2019 as Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing a policy aimed at propping up crude oil prices amid a weakening global economy.
Russian President, Vladimir Putin, said on Sunday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months.
Saudi Energy Minister, Khalid al-Falih, said the deal would most likely be extended by nine months and no deeper reductions were needed.
Oil prices have come under renewed pressure in recent months from rising United States supplies and a slowing global economy.
US crude oil output in April rose to a fresh monthly record of 12.16 million bpd, according to the United States Energy Information Administration, even though shale production growth likely peaked last year.