Nigeria has reservations about deeper Opec cuts

A move by Opec and non-Opec members toward deeper production cuts would be a "tough decision" for Nigeria, the country's oil minister Timipre Sylva said today.

Opec members will discuss today whether more needs to be cut in order to achieve the stated goal of market balance. One option is for an additional 400,000 b/d of cuts, which would take the total to 1.6mn b/d.

Sylva expressed reservations about the proposal for deeper cuts but said Nigeria would accept "if that is the position".

Nigeria was exempt from the first production agreement in 2016, in recognition of unrest that was disrupting its production. Since it was included in the deal in December 2018 Nigeria has been a serial non-complier, and it has faced mounting pressure from Opec's de facto leader, Saudi Arabia, to meet its pledge.

Nigeria's initial limit of 1.69mn b/d was lifted to 1.77mn b/d following Opec's ministerial meeting in early July. The change, which included a proportional revision to the baseline figure, was backdated to become effective as of June. Sylva reiterated Nigeria's full compliance with its production quota last month.

Sylva said the current crude price of around $60-65/bl is "good" for Nigeria.

"That's where we should be," he said.

By Rowena Edwards and Nader Itayim

source: Argus Media