By Bassey Udo
To continue to stabilise the international crude oil market and strengthen price, the Minister of the organization of Petroleum Exporting Countries (OPEC) and their non-OPEC counterparts on Wednesday agreed to extend the output cut arrangement till December 31, 2023.
The 45th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and non-OPEC Ministerial Meeting resolved in their joint meeting in Vienna, Austria, on Wednesday agreed further adjust downwards the overall oil production level by 2 million barrels per day effective August 2022.
In a communique issued at the end of their meeting on Wednesday, the Ministers said the decision was taken in the light of the uncertainty surrounding the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market.
The Ministers said the decision was also in line with the successful approach of being proactive, pre-emptive, and consistent approach adopted by OPEC and non-OPEC countries participating in the Declaration of Cooperation adopted since April 2020.
18The Minister said they reaffirmed the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020, which was further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on July 18, 2021 to extend the duration of the decision on output cut till the end of December 2023.
The latest decision involved the downward adjustment of the overall production levels by 2 million barrels per day, from the August 2022, starting November 2022 for OPEC and non-OPEC Participating Countries.
The details of the adjustment showed OPEC and Non-OPEC would account for a total output adjustment of about 43,856 barrels per day.
OPEC-10 member countries, consisting of Algeria, Angola, Congo, Equitorial Guinea, Gabon, Iraq, Kuwait, Nigeria, Saudi Arabia and United Arab Emirate would voluntarily cut about 26, 689 barrels per day from August 2022.
The latest cut is about 1,273 barrels per day adjustment from about 25,416 barrels per day cut during the last meeting in August.
Similarly, the Non-OPEC members, made up of Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan are to cut about 17,167 barrels per day, which is higher than 16,440 barrels day adjustment in August by 727 barrels per day.
from the adjustment figures, Nigeria’s required output cut would be about 1,826 barrels per day, about 84 per day more than 1,742 barrels per day figures in August.
At the end of teh meeting, participants reconfirmed the baseline adjustment approved at the 19th OPEC and non-OPEC Ministerial Meeting and adjusted the frequency of the monthly meetings to become every two months for the Joint Ministerial Monitoring Committee (JMMC).
The Minister also agreed to hold the OPEC and non-OPEC Ministerial Meeting (ONOMM) every six months in accordance with the ordinary OPEC scheduled conference, while granting the JMMC the authority to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting at any time to address market developments if necessary.
Also, they took a decision to extend the compensation period to March 31, 2023, resolving to ensure that compensation plans be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
While reiterating the critical importance of adhering to full conformity with the output cut agreement, the Ministers agreed to hold the 34th OPEC and non-OPEC Ministerial Meeting on December 4, 2022.
