Timi Sylva
Oil & Gas

OPEC/NON-OPEC ministerial summit: Sylva raises hope of crude oil prices increase by at least $15 per barrel

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…price rebound may give Nigeria additional revenues of about $2.8 billion

… cuts supply by up to ten (10) million barrels per day May-June 2020 among members

… Nigeria now to produce 1.412 million barrels per day as against 1.579

The Minister of State for Petroleum Resources, Chief Timipre Sylva, has expressed optimism that crude oil prices would soon rebound by at least $15 per barrel following OPEC+ counterparts’ historic curtailment of crude oil production at their April 9 ministerial meeting.

He said the intervention would also help to “rebalance and stabilize the global oil markets’’.

Sylva said this in a statement in Abuja on Friday on the fall-out of the 9th OPEC/NON-OPEC  declaration of cooperation ministerial meeting to curtail crude oil production up to 10 million barrels.

He said: “Nigeria joined OPEC+ to cut supply by up to Ten (10) Million Barrels per day between May and June 2020, Eight (8) Million Barrels per day between July and December 2020 and Six (6) million barrels per day from January 2021 to April 2022, respectively.

“Based on reference production of Nigeria of October 2018 of 1.829 million barrels per day of dry crude oil, Nigeria will now be producing 1.412 million barrels per day, 1.495 million barrels per day and 1.579 million barrels per day respectively for the corresponding periods in the agreement.

“It is expected that this historic intervention when concluded will see crude oil prices rebound by at least $15 per barrel in the short term, thereby enhancing the prospect of exceeding Nigeria’s adjusted budget estimate that is currently rebased at $30 per barrel and crude oil production of 1.7 million barrels per day.

“The price rebound may translate to additional revenues of not less than $2.8 billion for the Federation.

“Nigeria has joined other OPEC+ counterparts in a historic curtailment of crude oil production to rebalance and stabilize the global oil markets.

“Nigeria is participating in the pursuit of our commitment to the framework of the Declaration of Cooperation entered on 10th December 2016 and further endorsed in subsequent meetings as well as the Charter of Cooperation signed in July 2019.’’

Sylva, however, said condensate production of between 360-460 KBOPD were exempted from OPEC curtailment.

“The agreement awaits close out of ongoing engagement with Mexico to agree on its full participation.’’

The minister said despite the production curtailments that the historic agreement would entail, all planned industry development projects would continue.

“It is therefore pleasing to note that despite the production curtailments that this historic agreement will entail, all planned industry development projects will progress as they will be delivered after the termination of the 9th OPEC/Non-OPEC Ministerial Meeting Agreement on adjustments in April 2022.’’

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