The Organisation of Petroleum Exporting Countries (OPEC) yesterday in Vienna, Austria agreed to reduce its output target by 500,000 barrels a day.
At the 7th OPEC and non-OPEC Ministerial Meeting, which ended yesterday in Vienna, the group, which pumps more than half the world’s oil, decided for an additional adjustment of 500,000 barrels per day (tb/d) to the adjustment levels as agreed at a similar non-OPEC partners.
The development would lead to total adjustments of 1.7 mb/d. In addition, OPEC said several participating countries, mainly Saudi Arabia, will continue their additional voluntary contributions, leading to adjustments of more than 2.1 million barrels.
The participating countries however resolved that the additional adjustment would be effective as of January 1, 2020 and is subject to full conformity by every country participating in the Declaration of Cooperation’ (DoC).
The 14 member Organisation had in December 2016, agreed with non-OPEC partners including Russia to reduce supply by 1.2 million bpd from the start of this year.
OPEC members, Iraq and Nigeria are among the countries that were said to have failed to comply properly with pledged output reductions.
In October, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kolo Kyari had given the assurance that Nigeria would make cuts to its crude oil output to comply with OPEC output targets.
Nigeria’s September crude oil and condensate output was put at 2.1-2.2 million barrels per day (bpd), according to the corporation, According to a Reuters survey then, Nigeria pumped beyond its quota by 265,000 bpd in September, more than any other OPEC state.
“We will cut across the assets. The OPEC quota is on crude production only, not on condensate, so it doesn’t affect the condensate,” he reportedly told reporters at a conference in Fujairah in the United Arab Emirates.
“Our non-conformity is clearly on the crude, and it’s not significant so when you spread it across all the assets it will not be a shock.”
Kyari added that Nigeria hoped to raise oil production to about 3mb/d in the next two to three years.
OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members, with exemptions for Iran, Libya and Venezuela.