The Organisation of Petroleum Exporting Countries (OPEC) has commended Nigeria for achieving full conformity with its resolution in January 2020 to cut output to strengthen crude oil price and stabilize the market.
The organization gave the commendation at the end of its 14th virtual meeting of OPEC and non-OPEC Ministers under the Chairmanship of Saudi Arabia’s Minister of Energy, Abdul Aziz bin Salman, and Co-Chair Alexander Novak, who is also the Deputy Prime Minister of the Russian Federation.
The meeting noted the continued positive contributions of the Declaration of Cooperation (DoC) in support of a rebalancing of the global oil market in line with its decisions during the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on April 2020 to cut overall crude oil production by members and their allies.
Saudi Arabia’s contribution
The meeting noted the significant voluntary extra supply cut by the group’s leading producer Saudi Arabia in support of the global oil market stability.
The Ministers also commended Saudi Arabia for the extension of the additional voluntary adjustments of one million barrels per day for April 2021, saying it exemplified its leadership, and demonstrated its flexible and pre-emptive approach to the output cut resolution.
The Ministers approved a continuation of the production levels of March for the month of April, with the exception of Russia and Kazakhstan, which would be allowed to increase production by 130,000 and 20,000 barrels per day respectively, due to continued seasonal consumption patterns.
In reviewing the monthly report prepared by the Joint Technical Committee (JTC), including the crude oil production data for the month of February, the group acknowledged the positive performance of participating countries.
Overall conformity with the original decision, it noted, has achieved about 103 percent compliance level, saying it reinforces the trend of aggregate high conformity by participating countries.
Since the April 2020 meeting, the meeting said OPEC and non-OPEC countries withheld 2.3billion barrels of oil by end of January 2021, accelerating the oil market rebalancing.
The Meeting thanked Nigeria specially for achieving full conformity in January 2021, and compensating its entire overproduced volumes.
Commendation to Nigeria, Sylva
The meeting thanked Nigeria’s Minister of State for Petroleum Resources, Timipre Sylva, for his recent effort in embarking on shuttle diplomacy as Special Envoy of the joint ministerial monitoring committee (JMMC) to Congo, Equatorial Guinea, Gabon and South Sudan to discuss matters pertaining to conformity levels with the voluntary production adjustments and compensation of over-produced volumes.
During the meeting, the Ministers agreed to the request by several countries, which have not yet completed their compensation, for an extension of the compensation period until end of July 2021.
It also urged all participants to achieve full conformity and make up for previous compensation shortfalls, to reach the objective of market rebalancing and avoid undue delay in the process.
The Meeting observed that in December, stocks in Organization of Economic Cooperation and Development (OECD) countries had fallen for the fifth consecutive month.
On the recent improvement in the market sentiment by the acceptance and the rollout of vaccine programmes and additional stimulus packages in key economies, the group cautioned all participating countries to remain vigilant and flexible given the uncertain market conditions.
The next meetings of the JMMC and OPEC and non-OPEC Ministers are scheduled for March 31 and April 1, 2021, respectively.
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