OPEC+ Meeting Fallout: Nigeria Expects Extra $2.8bn Revenue From Price Rebound

•Now To Produce 1.412mbpd Of Crude
Nigeria’s delegation led by its Minister of State for Petroleum Resources, Chief Timipre Marlin Sylva, on Thursday participated in the 9th meeting of OPEC/Non-OPEC Declaration Of Cooperation Ministerial Meeting to cut global crude oil output by as much as 10m barrels per day, as part of efforts to manage its price at the international market

This, according to a statement he personally signed, would see Nigeria raking in additional $15 per barrel in the worst-case scenario 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 1.7m barrels per day.

The rebound, arising from the agreement which will see Nigeria’s quota reducing to 1.412mbpd in May and June from 1.829mbpd of October 2018, in the historic bid to stabilize global crude oil price could translate to as much as US$2.8bn in additional revenue accrual to Nigeria’s Federation Account.
Going by the agreement at the meeting also attended by Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, oil producers in the OPEC+ deal are voluntarily giving up 23% of their quota in the first instance, which see Saudi Arabia and Russian Federation, biggest OPEC and non-OPEC members reducing their quotas to 8.492mbpd respectively.

Thereafter, the global crude oil output cut is to become eight million barrels per day from July to December; and 6mbpd from January 2021 to April 2022.
The deal will specifically see the total output from OPEC and non-OPEC members reducing from 43.853mbpd to 33.853mbpd. A further review of the template will see OPEC and non-OPEC cutting their outputs to 20.598mbpd and 13.255mbpd respectively between May and June 2020.

The OPEC curtailment does not, however. affect condensate production, of which Nigeria enjoys between 360-460 KBOPD.

Nigeria is participating, he noted, in line with the government’s “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.”

“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,” the Minister added

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