Following the decision of OPEC member countries and their non-OPEC allies to halt the fall in global crude oil prices, Nigeria will now cut down its crude oil production to 1.77 million barrels per day.
Minister of State for Petroleum made this announcement in a chat with Blomberg TV, adding that Nigeria was ready to make deeper oil cuts if necessary.
The Details: He noted that Nigeria was in agreement with other members of OPEC to cut crude supplies further if prices continue to tumble. He also urged for stability in the market.
“Everybody agrees in OPEC that we need to stabilise the market. We cannot allow prices just to plummet,” Sylva stated.
Sylva said that the reduced crude oil production would begin this month. He said Nigeria overproduced in August and would now adopt the new production quota of 1.774 million barrels a day.
What you should know: Presently, Nigeria is producing 1.69 million barrels a day due to pipeline outages but averages about two million barrels a day when producing at full capacity.
OPEC member countries and their allies, collectively known as OPEC+, are due to meet in Vienna in early December.
Their current agreement for production cuts totalling 1.2 million barrels a day expires at the end of March.
According to a Nairametrics report, Minister of Finance, Mrs Zainab Ahmed, said there were strong indications of an oversupply of the oil market by next year, adding that when this happened, it would result in a fall in oil prices.
The minister said all three major forecasters, the Organisation of Petroleum Exporting Countries [OPEC}, the International Energy Association and the United States Energy Information Administration, had predicted that non-OPEC countries would grow oil production by about two million barrels this year and produce even more next year.