The Kuwait Oil Minister and chairman of the committee monitoring the compliance of OPEC and non-OPEC suppliers, Issam Almarzooq, has said Nigeria and Libya may be asked to cut their crude oil output soon in an effort to help re-balance the market. The two countries have boosted oil production since they were exempted from the global cuts led by the Organisation of Petroleum Exporting Countries and other producers.
Punch reports that OPEC and non-OPEC producers have invited the two African nations to their committee meeting in St. Petersburg, Russia, on July 24 to discuss the stability of their production, Bloomberg quoted Almarzooq as saying on the sidelines of an energy conference in Istanbul.
“We invited them to discuss the situation of their production. If they are able to stabilise their production at current levels, we will ask them to cap as soon as possible. We don’t need to wait until the November meeting to do that,” he said.
Crude price sank into bear territory last month amid concerns the cutbacks by OPEC, Russia and other allies are being partially offset by a rebound in supply by Libya, Nigeria and United States’ shale output. Libya and Nigeria were both exempt from the cuts due to their internal strife.
The two countries came into focus after they seemed to resolve some of the political challenges that had slashed their production. Libya’s oil output has climbed to more than one million barrels per day for the first time in four years. Nigeria’s production rose 50,000 bpd in June, according to a Bloomberg survey.
Abdulsamad Al-Awadhi, a London-based analyst and Kuwait’s former representative to OPEC, also said:
“OPEC needs to have better compliance, and it must respect the right of Libya and Nigeria to go back to the market. Other countries that raised output while Libya and Nigeria are out should do more and give space to these two countries to go back to the market.”
Giving Libya and Nigeria exemptions to production cuts was a collective decision, and any proposal to include them in OPEC’s plans will also require a joint decision, the Secretary-General, OPEC, Mohammed Barkindo, told reporters at the event in Istanbul. He said it was still too early to discuss steeper cuts by the group and its allies.
The OPEC/non-OPEC ministerial monitoring committee will discuss the impact of the output curbs on the market at the July 24 meeting, Kuwait’s Almarzooq said. Deepening the reductions under the current agreement is not on the agenda, he said.
“It is too early to discuss deeper output cuts by OPEC/non-OPEC producers participating in the agreement to curb production,” Almarzooq said. “We just finished the meeting in May and we need to give it more time.”
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