- Kachikwu: Deal for OPEC+ Cut Extension Coming
Members and non-members of the Organisation of Petroleum Exporting Countries (OPEC+) deal to curb oil production will possibly be extended, “hopefully for another six months” beyond the end of June, Minister of State, Petroleum Resources, Emmanuel Kachikwu, said yesterday.
The deal has stabilised the oil market and easing the curbs could bring back excess supply, he told reporters at a conference in Malabo, Equatorial Guinea. However, Nigeria, which has pumped more crude than it pledged under the deal, will find it challenging to implement its share of the cuts because of output from a new project called Egina, Kachikwu said.
The OPEC+ agreement has “been able to get prices to a point where both consumers and producers are at least a bit comfortable. I would like to see that go on.” The deal to reduce oil output by 1.2 million barrels a day, which helped crude rise by the most in a decade last quarter, expires at the end of June. While there’s general backing within OPEC and its allies for an extension, Russia is said to remain undecided.
Nigeria actually boosted crude production by 90,000 bpd to 1.92 million last month, according to a Bloomberg survey. Kachikwu said the country is currently pumping about 1.7 million bpd. The country agreed to reduce output to 1.685 million bpd under the OPEC+ deal. The Egina project, which started this year, will pump 150,000 barrels bpd at a peak rate but supply is “right now probably not there yet,” Kachikwu said.
The OPEC+ group’s compliance with the cuts will improve from about 90 per cent in the months ahead, OPEC’s Secretary-General Mohammad Barkindo said. He said Kachikwu has assured him the country is doing everything possible to meet its obligations. A full meeting of ministers from OPEC and its allies is scheduled in June in Vienna.