CRISIS | Nigeria may lose OPEC‘s oil production exemption

Nigeria may lose the oil production exemption granted it and Libya by the Organisation of Petroleum Exporting Countries (OPEC) as a result of production disruptions, it was gathered at the weekend.

These disruptions were occasioned by attacks on infrastructure in the two countries.

Nigeria’s exemption may have to go because the peace moves of the Federal Government in the Niger-Delta region have started yielding dividends, as the militants have agreed to give peace a chance. Crude oil production has moved to about 1.8million barrels per day (bpd), according to government sources.

An oil industry stakeholder, who spoke on condition of anonymity, said Nigeria, has demonstrated strong resolve to settle its internal problems, as well as improving crude oil production greatly.

He said the country may by May 25 stop enjoying production exemption once it is able to stop violence perpetrated by militants and its resultant effects on oil production.

The source said: ‘’Nigeria appears well on the way to full restoration of its output that could see it pressured by its fellow OPEC members to end its exemption from the production agreement.” An energy accountant with the University of Ibadan, Prof Adeola Akinnisiju, said the development is good for the country, which has seen its oil output fall drastically in recent times.

He said the country is fighting militancy and recession in the global oil market and its attendant fall in the international prices of crude oil, adding that the problems are going to be over soon.

Akinnisiju said: “If the prices of crude oil can increase from $20 per barrel of crude oil to $52 and later $56 per barrel within two weeks and militant activities dropped significantly, all in one year, then brighter days are ahead of Nigeria. Oil is the major source of revenue in the country, providing over 70 per cent of Nigeria’s exports.  The Federal Government is having problems getting money for its budget, a development, which has slowed down current and capital expenditure.’’

He urged stakeholders to provide an enabling environment for the industry, arguing that the sector can only thrive in a crisis-free environment.

The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), MaikantiBaru, said OPEC is monitoring the exemptions granted Nigeria and Libya. He said the development became necessary, in order to determine the next line of action for the two countries.

Be the first to comment

Leave a Reply

Your email address will not be published.