Chineme Okafor in Abuja
The Organisation of Petroleum Exporting Countries (OPEC) has called on its member countries and ally producing nations led by the Russian Federation to comply fully with the terms agreed in their extended production limitation agreement to stabilise the oil market.
Stating that it is ‘fair and equitable’ for all parties to abide by the terms agreed on during their last meeting, OPEC explained that the agreement recorded 87 per cent conformity in May as against the 100 per cent expected.
Its Joint Ministerial Monitoring Committee (JMMC) disclosed this during a recent virtual meeting chaired by Saudi Arabia’s Minister of Energy, Prince Abdul Aziz Bin Salman and co- Minister of Energy of the Russian Federation, Alexander Novak.
According to OPEC, the JMMC reviewed the monthly report prepared by the Joint Technical Committee (JTC) and recent developments in the global oil market, as well as immediate prospects for the remainder of 2020 and into 2021, and reiterated the critical role that the ‘Declaration of Cooperation’ (DoC) continues to play in supporting oil market stability and economic recovery, in the face of the COVID- 19 pandemic.
It stated that member countries and allies agreed on April 12, 2020, to adjust downwards their overall crude oil production, adding that the decisions taken at the recent 179th Meeting of the OPEC Conference and the 11th OPEC and non-OPEC Ministerial Meeting on June 6, 2020 affirmed this.
“This included extending the first phase of the production adjustments by a further month, now till 31 July 2020, and subscribing to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, to accommodate the underperformed volumes in July, August and September, in addition to their already agreed production adjustment for such months,” it explained.
According to it: “The committee took note of the overall conformity of 87 per cent for the month of May 2020. It also observed individual country conformity levels and reiterated the critical importance that all participating countries achieve their 100 per cent level and make up for any monthly shortfalls in the months of July, August and September.”
The JMMC welcomed the expressed commitments from countries below the 100 per cent May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September, but emphasised that, “the attainment of 100 per cent conformity from all participating countries is not only fair and equitable, but vital for the ongoing and timely rebalancing efforts and helping deliver a sustainable oil market stability.”
It also explained the critical importance of adhering to full conformity and compensating the overproduced volumes in the months of May and June, during the months of July, August and September 2020, in accordance with the pact agreed.
It said that Iraq and Kazakhstan have submitted their compensation schedules and agreed to give other underperforming participants which have not yet submitted their final plans until this Monday 22 June 2020 (yesterday) to submit their schedules for compensation.
The JMMC equally expressed their appreciation of additional voluntary contributions totalling 1.2 million barrel a day (mbd) made by Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Oman in the month of June 2020.